A China Law Blog heavy week, and there's nothing ever wrong with that.
China WFOE. Do It Right Or Your Money Never Leaves at China Law Blog
Go West, China! But, Find Someone To Meet You There First by Aimee Barnes
How To Shut Down Your China Business. Hint: Do Not Emulate The Baltimore Colts at China Blog
On Fake JVs at China Law Blog
And Comment at China Hearsay
On Investing in China at China Hearsay
And comment at China Law Blog
Sunday, March 29, 2009
Thursday, March 26, 2009
Danone Charging Forth With Microcredit in China
Knowledge@Wharton recently published an article, Microfinance in China: A Growing Footprint in the Wake of New Guidelines. The seed for the article is obviously the March 11 announcement of plans by the China State Council's Poverty Support Office, Danone Group, and Grameen Bank.
The microfinance numbers in China are astounding. Here are some key stats from the article on the size of microfinance in China:
This morning I was flipping through the final section of the March 19th Economist and noticed a headline suggesting that even microfinance was displaying vulnerability in the credit crisis, Sub-par but not subprime. I had to read the article to discover whether Danone was stepping into another mangrove. The answer appears to be no, at least as far as funding is concerned. A lot of microfinance institutions (MFIs, apparently) are funded by aid organizations. Aid organization budgets are being cut, and MFIs are getting the short end of that stick.
So, Danone looks somewhat safe here. And if the deal does blowup... Well... I really miss saying Wahaha aloud, and if we start talking about Danone again, maybe, just maybe, I can go back to saying "Wahaha," loudly.
The microfinance numbers in China are astounding. Here are some key stats from the article on the size of microfinance in China:
- The National Development Bank (NDB) "has issued 4.6 billion yuan (US$676 million) in microloans during the past three years."
- Rural Credit Cooperatives "began microfinance operations ten years ago and had total loans of 3.2 trillion yuan (US$471 billion) by the end of 2007."
This morning I was flipping through the final section of the March 19th Economist and noticed a headline suggesting that even microfinance was displaying vulnerability in the credit crisis, Sub-par but not subprime. I had to read the article to discover whether Danone was stepping into another mangrove. The answer appears to be no, at least as far as funding is concerned. A lot of microfinance institutions (MFIs, apparently) are funded by aid organizations. Aid organization budgets are being cut, and MFIs are getting the short end of that stick.
So, Danone looks somewhat safe here. And if the deal does blowup... Well... I really miss saying Wahaha aloud, and if we start talking about Danone again, maybe, just maybe, I can go back to saying "Wahaha," loudly.
Monday, March 23, 2009
Law Nerd Rejoices at Economist Cover
The other day I opened my mailbox and found myself staring at this:
This cover struck me as substantially similar to a pair of illustrations from my academic past. To confirm, I picked up my doorstop and flipped through the relevant section until I came upon the following two illustrations:
By Saul Steinberg:
By Kevin Nolan and Craig Nelson for Columbia Pictures:
Confirming that I was seeing intended substantial similarity was a sign in The Economist artist's representation of China saying, "With apologies to Steinberg and The New Yorker." The italicization and underlining of Steinberg, as well as the form of the drawing itself is a nod to the important copyright dispute in Steinberg v. Columbia over The New Yorker and Moscow on the Hudson illustrations above.
A quick discussion of the legal stuff involved in Steinberg:
The court ruled that Columbia infringed upon Steinberg's copyright because the movie poster was substantially similar in expression to The New Yorker cover, and it was misappropriated from The New Yorker. Or at least that's what the court said. Practically, the court probably ruled this way because the facts showed that Kevin Nolan essentially told Craig Nelson to copy The New Yorker cover.
So, what's The Economist cover mean?
The fun part about copyright cases is that, despite Holmes' admonishment, US judges enjoy inserting art criticism into their decisions. In the Steinberg case, Judge Louis Stanton interpreted the cover of the magazine for, as one professor has put it, people who wish they lived in New York as meaning such:
The first is a pagoda on what must be Australia off to the right of illustration. 10 bucks says its a 'nod' to Kevin Rudd.
The second is that the combination of intentionally copied cover and an apology for copying on a sign in China raises the cover to satire. Author's intention: China is copying, knows it, and is not going to do more about it than issue a hollow apology, yet it still sees itself as the center of the world[?]. "Copyright protection in China . . . is downright terrible," and China doesn't seem to care, yet.
Does The Economist's Cover Infringe Steinberg's Copyright?
Well... Maybe, but I'd keep myself from that panglossian height. Parody is a fair use defense to infringement, but this is satire, not parody. How do you tell the difference? Satire uses an author's expression to attack a third party, and parody uses an author's expression to attack the original author. Parody is fair use because it is used for offering comment and criticism of the original author's work which is a permitted purpose under copyright law. Satire is not fair use because it is not commenting upon or criticizing the original author's work.
My mnemonic for keeping the two straight? Voltaire is a great satirist, and Candide is a satire using New World travelogues to attack Gottfried Leibniz, and everyone else. Get an edition with sweet footnotes, the book is awesome.
This cover struck me as substantially similar to a pair of illustrations from my academic past. To confirm, I picked up my doorstop and flipped through the relevant section until I came upon the following two illustrations:
By Saul Steinberg:
By Kevin Nolan and Craig Nelson for Columbia Pictures:
Confirming that I was seeing intended substantial similarity was a sign in The Economist artist's representation of China saying, "With apologies to Steinberg and The New Yorker." The italicization and underlining of Steinberg, as well as the form of the drawing itself is a nod to the important copyright dispute in Steinberg v. Columbia over The New Yorker and Moscow on the Hudson illustrations above.A quick discussion of the legal stuff involved in Steinberg:
The court ruled that Columbia infringed upon Steinberg's copyright because the movie poster was substantially similar in expression to The New Yorker cover, and it was misappropriated from The New Yorker. Or at least that's what the court said. Practically, the court probably ruled this way because the facts showed that Kevin Nolan essentially told Craig Nelson to copy The New Yorker cover.
So, what's The Economist cover mean?
The fun part about copyright cases is that, despite Holmes' admonishment, US judges enjoy inserting art criticism into their decisions. In the Steinberg case, Judge Louis Stanton interpreted the cover of the magazine for, as one professor has put it, people who wish they lived in New York as meaning such:
The parts of the poster beyond New York are minimalized, to symbolize a New Yorker's myopic view of the centrality of his city to the world. The entire United States west of the Hudson River, for example, is reduced to a brown strip labeled "Jersey," together with a light green trapezoid with a few rudimentary rock outcroppings and the names of only seven cities and two states scattered across it. The few blocks of Manhattan, by contrast, are depicted and colored in detail. The four square blocks of the city, which occupy the whole lower half of the poster, include numerous buildings, pedestrians and cars, as well as parking lots and lamp posts, with water towers atop a few of the buildings.Replace 'New York' with 'China,' and 'Jersey' with 'America,' and you've got a pretty clear picture of the artist's basic intention in The Economist cover. But, there are a couple extra points upping the snark factor.
The first is a pagoda on what must be Australia off to the right of illustration. 10 bucks says its a 'nod' to Kevin Rudd.
The second is that the combination of intentionally copied cover and an apology for copying on a sign in China raises the cover to satire. Author's intention: China is copying, knows it, and is not going to do more about it than issue a hollow apology, yet it still sees itself as the center of the world[?]. "Copyright protection in China . . . is downright terrible," and China doesn't seem to care, yet.
Does The Economist's Cover Infringe Steinberg's Copyright?
Well... Maybe, but I'd keep myself from that panglossian height. Parody is a fair use defense to infringement, but this is satire, not parody. How do you tell the difference? Satire uses an author's expression to attack a third party, and parody uses an author's expression to attack the original author. Parody is fair use because it is used for offering comment and criticism of the original author's work which is a permitted purpose under copyright law. Satire is not fair use because it is not commenting upon or criticizing the original author's work.
My mnemonic for keeping the two straight? Voltaire is a great satirist, and Candide is a satire using New World travelogues to attack Gottfried Leibniz, and everyone else. Get an edition with sweet footnotes, the book is awesome.
Sunday, March 22, 2009
Posts of the Week: 3/16 - 3/22
Ten Thundering Proposals from the Two Conferences at Chaile
One can always use a reminder that legislative excess is not endemic to Capitol Hill.
China Company Owe You Money? A 'New' Way To Get It at China Law Blog
Yesterday, I briefly talked to someone who was doing the same thing, but the opposite.
Tracking Asia's External debt at 2Ppoint6billion
Some interesting charts on Asian nation's debt:GDP ratios.
three class actions go after chinese manufacturers at China Esquire
Buying from suppliers online at Silk Road International Blog
Tons of useful info with price points.
Handful of Good Posts on Coke-Huiyan from:
China Journal
China Law Blog
China Hearsay
Silicon Hutong
One can always use a reminder that legislative excess is not endemic to Capitol Hill.
China Company Owe You Money? A 'New' Way To Get It at China Law Blog
Yesterday, I briefly talked to someone who was doing the same thing, but the opposite.
Tracking Asia's External debt at 2Ppoint6billion
Some interesting charts on Asian nation's debt:GDP ratios.
three class actions go after chinese manufacturers at China Esquire
Buying from suppliers online at Silk Road International Blog
Tons of useful info with price points.
Handful of Good Posts on Coke-Huiyan from:
China Journal
China Law Blog
China Hearsay
Silicon Hutong
Wednesday, March 18, 2009
Stability of China: Pei v. Fallows
Eh, sort of. Might be a bit provocative. Anyways...
Minxin Pei and James Fallows each have articles out this month in Foreign Affairs and The Atlantic which seek to examine what the financial crisis means for China. Mr. Fallows frames the question thusly:
As to cultural and political realities, Mr. Fallows finds that the "unspoken premise" on which the "'China is over' hypothesis" rests, "that average Chinese people just barely tolerate the social bargain the government now offers--limited freedom, potentially unlimited wealth," is fundamentally flawed. Though I can't say I disagree with his characterization, Mr. Fallows' premise lies on personal anecdotes which are supposed to make us think that the Chinese people's strength of character forged in the '70s will carry them through any catastrophe.
Many of the Chinese I've met have impressive life stories, but just because they or their parents or their grandparents worked on a labor gang does not mean that the almost "90,000 riots, strikes, demonstrations, and collective protests reported annually" will not "intensify in hard times," as Mr. Pei argues in Will the Chinese Communist Party Survive the Crisis? Rather than look to the average Chinese as a threat to China's stability, Mr. Pei suggests that power struggles in the ruling elite of the Party might create divisions in the upper ranks that have not existed in modern China. Here's a sampling of his characterization of the ruling elite:
Both men field solid arguments, but I think that Mr. Pei's are the most worth bearing in mind. Mr. Fallows points out that most of the demonstrations in China are not aimed at the Party in Beijing, but against local governments. The financial crisis and the efficacy of Beijing's stimulus plan might change that. If Beijing's stimulus plan fails to deliver enough to satisfy a lot of people, then this will open the door for wider discontent with the Party's ruling elites. Then the elites will have the opportunity, if not the need, to distinguish themselves from each other which might set the stage for struggle.
Minxin Pei and James Fallows each have articles out this month in Foreign Affairs and The Atlantic which seek to examine what the financial crisis means for China. Mr. Fallows frames the question thusly:
Is the “China story” as we’ve known it—the three-decade-long story of modernization and prosperity supervised by an authoritarian regime whose economic success excuses most complaints and failings—over? Has it reached its limits and exposed its contradictions? If China does not keep moving forward and growing, will it tear itself apart?In China's Way Forward, Mr. Fallows offers two reasons why China will rebound 1) economics; and 2) "cultural and political realities." The economics argument is swallowed more easily. China's stimulus plan is fiscal expansion on infrastructure projects which should employ a lot of people and keep China's economy growing. A stable authoritarian government allows China to use fiscal expansion to stimulate the economy without falling into the vices that have made Keynesian economics unworkable under representative governments: slow implementation and inefficiency. Additionally, China's banks are flush with cash and have been ordered to lend. My only problem, and maybe I'm just addicted to footnotes with multiple sources, is that Mr. Fallows rosy picture of China's economic future is painted with guidance from reports by investment firms. These are more than observers as they are literally vested in continued confidence in China's economic future, and I'd take 'em with a grain of salt.
As to cultural and political realities, Mr. Fallows finds that the "unspoken premise" on which the "'China is over' hypothesis" rests, "that average Chinese people just barely tolerate the social bargain the government now offers--limited freedom, potentially unlimited wealth," is fundamentally flawed. Though I can't say I disagree with his characterization, Mr. Fallows' premise lies on personal anecdotes which are supposed to make us think that the Chinese people's strength of character forged in the '70s will carry them through any catastrophe.
Many of the Chinese I've met have impressive life stories, but just because they or their parents or their grandparents worked on a labor gang does not mean that the almost "90,000 riots, strikes, demonstrations, and collective protests reported annually" will not "intensify in hard times," as Mr. Pei argues in Will the Chinese Communist Party Survive the Crisis? Rather than look to the average Chinese as a threat to China's stability, Mr. Pei suggests that power struggles in the ruling elite of the Party might create divisions in the upper ranks that have not existed in modern China. Here's a sampling of his characterization of the ruling elite:
The current Chinese leadership is a delicately balanced coalition of regional, factional, and institutional interests, which makes it vulnerable to dissension.Mr. Pei argues that the Party is brutally efficient at quieting social discontent, but that elite power struggles might lower this efficiency allowing instability in migrant workers and the middle class to grow. This would result in further elite power struggles, allowing greater instability, turning into a cycle of "progressive destabilization."
No single individual towers above the others in terms of demonstrated leadership, vision, or performance -- which means that no one is beyond challenge, and the stage is set for jockeying for preeminence.
China's nonideological ruling elites have stuck with the party because it has been paying them off. But when economic hardship ends the easy handouts, the elites' support and loyalty to the system can no longer be taken for granted.
Both men field solid arguments, but I think that Mr. Pei's are the most worth bearing in mind. Mr. Fallows points out that most of the demonstrations in China are not aimed at the Party in Beijing, but against local governments. The financial crisis and the efficacy of Beijing's stimulus plan might change that. If Beijing's stimulus plan fails to deliver enough to satisfy a lot of people, then this will open the door for wider discontent with the Party's ruling elites. Then the elites will have the opportunity, if not the need, to distinguish themselves from each other which might set the stage for struggle.
Sunday, March 15, 2009
Posts of the Week: 3/9 - 3/15
Will China Buy The World? The Beijing Debate at China Journal
Real Estate is in the Headlines at CER: China Real Estate News
Why is 8% China's Hurdle at All Roads Lead to China
Voidable Contracts at Silk Road International Blog
Real Estate is in the Headlines at CER: China Real Estate News
Why is 8% China's Hurdle at All Roads Lead to China
Voidable Contracts at Silk Road International Blog
Thursday, March 12, 2009
Jack Ma on the Foundation of Corporate Social Responsibility
After a choice Mr. Ma line I wanted to open this up with it, but then they just kept coming. Here's a sampling:
Mr. Ma and his team from Alibaba have spent the past two weeks touring America to foster team development, to look for partners, to seek to enlarge their US office, and to find the same inspiration he has found here in the past. Instead he found a depressed mood--there was no talk about IPOs and stock price, and people were no longer talking about how their product would change the world. He found the first as welcome news, and the second as troubling, with Starbucks as the exception.
Mr. Ma expressed concern about China's business culture from a year ago. The talk was always about IPOs and stock price, but he did not think this was productive business. He believes business and entrepreneurship is creating value for your customer. And this is the sunshine Mr. Ma sees in the crisis that we must learn to live with. Private business must take on the mantle of social responsibility, and the foundation of corporate social responsibility according to Mr. Ma is:
Tomorrow is beautiful, but most people die tomorrow evening.If the theme of the talk was the spirit of entrepreneurism, then the spirit of Mr. Ma's entrepreneurism surely lies in his optimism. But that is no novel observation. What else did this talk teach us about the man who idolizes Lee Iacocca from the country of his inspiration?
The world has changed: I never expected America to become so socialist.
There's no longer a crisis, you should have gotten use to the way things are.
Mr. Ma and his team from Alibaba have spent the past two weeks touring America to foster team development, to look for partners, to seek to enlarge their US office, and to find the same inspiration he has found here in the past. Instead he found a depressed mood--there was no talk about IPOs and stock price, and people were no longer talking about how their product would change the world. He found the first as welcome news, and the second as troubling, with Starbucks as the exception.
Mr. Ma expressed concern about China's business culture from a year ago. The talk was always about IPOs and stock price, but he did not think this was productive business. He believes business and entrepreneurship is creating value for your customer. And this is the sunshine Mr. Ma sees in the crisis that we must learn to live with. Private business must take on the mantle of social responsibility, and the foundation of corporate social responsibility according to Mr. Ma is:
- Creating jobs.
- Creating value for your customers.
Wednesday, March 11, 2009
Jack Ma Webcast. Here. Tomorrow Morning. 4:30am PST.
This morning I was contacted by a member of The Dilenschneider Group with the opportunity to be among the hosts for a webcast by Jack Ma entitled "Embracing the Spirit of Entrepreneurship." I'll have a post up tomorrow morning to host the live webcast on this page. The post will be up at 3:30am PST, and the webcast begins here at 4:30am PST.
Here's the official blurb from the Asia Society:
Here's the official blurb from the Asia Society:
Known as China’s Web King, Jack Ma is Chairman and CEO of Alibaba Group, the leading e-commerce company in China and one of the world’s largest online trading platforms. A pioneer in the Chinese Internet industry, Jack is recognized as the man who put China on the Net. Over a decade ago Jack founded China’s first Internet-based company and has since transformed China’s Internet industry. Jack was named by Fortune Magazine as one of the “25 Most Powerful Businesspeople in Asia” in 2005, “Businessperson of the year” by BusinessWeek in 2006, and one of the 30 “World’s Best CEOs” by Barron’s in 2008. Jack Ma will speak about building Alibaba, and share his insight on technological innovation and development as the driving forces of the global e-commerce industry.I don't think that Jack Ma has ever been accused of being boring. You'd have a hard time finding a more engaging speaker. I'm looking forward to his talk tomorrow, and hope you'll join me tomorrow.
Tuesday, March 10, 2009
G-20 Stimulus Comparison
The Brookings Institution recently published a comparison of the stimulus packages of the G-20 countries in anticipation of the upcoming London G-20 Summit. The authors of the report play it neutral without comment on the pros and cons of the various stimulus packages, though they do take special note that the US and China will have the two largest stimulus packages in 2009 and 2010. The aggregator that I found the link from, The Browser, provocatively points this out:
Something about fiscal expansion unnerves me. Not as much as TARP, though. At least stimulus spending can be directed towards projects that can directly benefit a larger cross-section of the population. Why can't we just let the FDIC do its thing?
Only China and US are doing anything like enough.Free exchange at the Economist runs with this idea in a couple of posts today. In one post the blogger calls on Europe for some more stimulation:
As much as America is at fault in the crisis, and as popular as America bashing may be, there is no question that its financial assistance has helped sustain the global economy, and that its stimulus is generous by international standards (the moreso given America's role as global consumer). It's time for Europe to shoulder its share of the responsibility in ending this downturn.In the other, the blogger provides links to IMF data which shows that GDP multipliers from fiscal expansion are greatest in the US and Japan when there is global fiscal expansion. Presumably, the more governments that are spending the greater the effect will be for all governments that seek a multiplier on their investment reflected in their GDP. More detail can be found in the IMF report.
Something about fiscal expansion unnerves me. Not as much as TARP, though. At least stimulus spending can be directed towards projects that can directly benefit a larger cross-section of the population. Why can't we just let the FDIC do its thing?
Sunday, March 8, 2009
Posts of the Week: 3/2 - 3/8
Profile of China's Software Industry in 2008 at CER: China IT and Telecom News
The Boss' Dream: Bigger Empire, Fewer Direct Reports at ChinaBizGov
Looks like a new investment company to manage some SOEs is on the way.
China's Stimulus Package Pie Chart at China Environmental Law Blog
Joking aside, pie charts are totally amazing. And, the post has been updated with a US pie chart, too.
China's Environmental Protection 12th Five Year Plan at China Environmental Law Blog
A look at topics the MEP is targeting for research.
Some “Easy” China Trademark Wins for Bridgestone at China Hearsay
When IP litigation goes right in China.
China IPR Wars Heat Up at China Hearsay
Will Your US Judgment Be Enforced Abroad? Not China, But Maybe at China Law Blog
China Food Safety: Executions Aren't Working So Let's Try New Standards at China Law Blog
Portrait Rights in China: When They Say Cheese, You Say See You In Court at IP Dragon
A Tale of Two Packages--and Two Stock Markets at Managing the Dragon
Not a dickensian tale of London and Paris. More of a comparative analysis based on market response in China and the US.
The Boss' Dream: Bigger Empire, Fewer Direct Reports at ChinaBizGov
Looks like a new investment company to manage some SOEs is on the way.
China's Stimulus Package Pie Chart at China Environmental Law Blog
Joking aside, pie charts are totally amazing. And, the post has been updated with a US pie chart, too.
China's Environmental Protection 12th Five Year Plan at China Environmental Law Blog
A look at topics the MEP is targeting for research.
Some “Easy” China Trademark Wins for Bridgestone at China Hearsay
When IP litigation goes right in China.
China IPR Wars Heat Up at China Hearsay
Will Your US Judgment Be Enforced Abroad? Not China, But Maybe at China Law Blog
China Food Safety: Executions Aren't Working So Let's Try New Standards at China Law Blog
Portrait Rights in China: When They Say Cheese, You Say See You In Court at IP Dragon
A Tale of Two Packages--and Two Stock Markets at Managing the Dragon
Not a dickensian tale of London and Paris. More of a comparative analysis based on market response in China and the US.
Monday, March 2, 2009
What Don't You Know About China's New Patent Law?
Well, do you have a free 84 minutes? If so, then this freely accessible Baker & McKenzie Webinar will raise and answer just about any question you may have. They even discuss early judicial interpretations and possible contents of the implementing regulations.
Unfortunately, I have been unsuccessful in finding a freely accessible version of the law itself, but I'll let you know when I do.
Unfortunately, I have been unsuccessful in finding a freely accessible version of the law itself, but I'll let you know when I do.
Sunday, March 1, 2009
Posts of the Week: 2/23 - 3/1
How to Fit In as an Expat Executive in China at China Journal
Third Party Contracts at Silk Road International
Can Smoot-Hawley only happen in the US? at China Financial markets
China Law. What's Insurance Got To Do With It? at China Law Blog
The Business Side Of China Law Practice at China Law Blog
Third Party Contracts at Silk Road International
Can Smoot-Hawley only happen in the US? at China Financial markets
China Law. What's Insurance Got To Do With It? at China Law Blog
The Business Side Of China Law Practice at China Law Blog
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