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China Law Updates/Ramblings
Met with two old friends this month, both of whom have the following in common:
- They were both born in China and did their undergraduate work at top schools there.
- They are both now American citizens and have lived between the U.S. and China for the last 20 or so years.
- They both have a highly technical Ph.d from top U.S. schools.
- They both are super-smart and honest to a fault.
I had a great conversation with both of them (at separate times) and the takeaways were as follows:
1. Economic and business mood in China is okay. There is concern about the economy but not fear.
2. Everyone is taking the anti-corruption crackdown seriously. It has not come close to rooting out corruption, which remains pervasive, but it is a making a go of it. The populace generally favors it, or at least that is what everyone is saying.
3. Chinese and foreign businesses are taking the increased emphasis on rule by law seriously. When I said that our China lawyers were dealing with what seems like a never-ending influx of new WFOE formation work, neither seemed at all surprised and one even correctly guessed that many of our clients had been doing business in China for years and had just recently concluded that the costs of formalizing that business with a WFOE were less than the risks of having to argue to a government official that no WFOE was necessary.
4. China is not innovating. It is still just copying. I was surprised to hear this from both of them, but they insist this is the case. One even analogized it to the Beijing silk market, where the goods are pretty much all the same and the only attempts to differentiate are on price. This person said that someone really high up at the last Chinese company for which he worked once told him that the only reason the company had been formed and was able to do so well its first few years was because it was undercutting everyone else by 10-20%. But when people starting realizing that the quality just was not there, its market share plunged and never recovered.
5. China’s big cities are getting expensive. Beijing and Shanghai now cost nearly the same as New York.
What are your thoughts on the above?
The post China Law Updates/Ramblings appeared first on China Law Blog.
We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.
Source: http://www.chinalawblog.com/2015/03/china-law-updatesramblings.html
