China Business: Have You Checked the Children?

China lawyers

Though non-lawyers who deal with China love to talk about China’s “uncertain” legal landscape, the boring reality is that we China lawyers tend to read things the same way nearly every time. Sure we sometimes jabber back and forth about whether it is better to arbitrate in Hong Kong and then try to get the arbitration award enforced in Shanghai, or just arbitrate in Shanghai from the get-go.

But on the big legal issues that confront foreign businesses that do business in China or with China, there is usually no dispute.

We lawyers generally think alike when it comes to legal issues.

I thought of all this after just having read a China Hearsay post extolling how much more cooperative the Chinese government is than the United States government. The post is titled, U.S. Tech Startups: China Is Coming For You [link no longer exists] and I am not sure whether it intentionally references the horror movie idea of a monster coming for you, but if doesn’t, it should have.

To grossly summarize this post and to add my own slightly blunter spin to it, the post says the following:

1.  The media story on which the post is based is really vague. It is certainly vague if you are a lawyer trying to figure out what is really going on. This only increases the sense of dread. Who and what is really lurking out there?

2.  The article, along with probably 98% of its readers, are of the view that everything is and will be great for this US company in China. China Hearsay sees a big giant IP sucking zombie with a bloody axe.

Me, I am so worried for this U.S. company that I could only scan the post once and now I cannot even return to it. Reading that post was like getting punched in the stomach. It is like seeing a little kid on a train track with a train rapidly approaching. It really is that bad and if you have been involved with China (or really any other emerging market economy), you know exactly what I am talking about here.

I just hope the kid jumps off the track before it is too late.

Read China Hearsay’s post and let us know how it makes you feel.

6 responses to “China Business: Have You Checked the Children?”

  1. Dan, what would be your legal advice to this company and joint venture if the final products are to be exported to US in the future. How does the US patent this company hold can protect it in this case?

  2. I have been doing business in China for the last ten years. I read Stan’s post and, like you, I got a really bad feeling before I even finished it. This guy will be lucky to get out of China with the shirt on his back.

  3. So the vibe I’m getting here is that American tech companies should just keep R&D and sourcing away from China?
    So I’ve been hearing from you that IP protection has been getting better, but then there’s always the scare story like this that tells us it really isn’t getting better.

  4. A truth behind is that China is simply too important to be missing in the businessman’s bag of knowledge. Anybody get the basic information on dealing in US or Europe from school, tv and real life … well, most of them. While on China many newspapers and TVs split between a very simplified “Chinese-what-a-nice-villagers” and “Chinese-what-a-bad-villains”.
    In times of change, learners inherit the Earth (wish was mine, but the quote is from the great Erich Fromm)
    By the way, there is a great list of books in this very blog (thanks Dan!)
    http://www.chinalawblog.com/2009/12/the_best_ten_books_on_china_fo.html

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