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September 26th, 2006

Rumors Come True

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Mind-boggling to me that the head of Shanghai government has been removed from his current position. 

It was not the news itself that shocked me.
The thing is weeks ago, when I was in Shanghai, I talked to a property agent and he mentioned Chen was now detained in a suburb district (if not wrong, Chuansha) and was under ''shuang gui". I didn't believe it, because if so, he would be the biggest fish that the party ever caught on corruption. I even sniffed at it because I don't think a property agent got source to know things at high confidentiality. It must be rumors, I thought.

 

And rumors, just like what has happened a lot of times, become true.

 

 

September 1st, 2006

It's A Non-story

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Yesterday on my trip from Guangxi to Guangdong for transit, I had a little glimpse of the local Chinese newspaper.

One minute of self confession before going on with the non-story: I AM an extremist.
There was a time that I doubted myself so much whether I should stay in the legal industry after much efforts being put to improve myself to be more fit in the lawyering scene. Because lawyers are supposed to be calm and objective. Look at them, they are seldom extreme about anything. None of my lawyer friends is easily getting agetated actually. To be in line with the unspoken rule in pratice, I have tried to keep my extreme (crazy/mad/subjective...) ideas from any peers. This results in that I am less extreme now. But, in the breaks, I still got an appetite for kinky stories and things.

Some minutes of the readers (if any) of this post and of myself would never come back.

Continue with my trip. So I saw an interesting article about a UK lecturer teaching in some universties in Shanghai on [subject], who also happens to have been blogging on his private life in great details, has been condemned by a Chinese professor (for phychology if I recall correctly). The condemnation goes in this way: the Chinese guy firstly let the press know all the 'nasty things' that the UK guy did to the Chinese girls. And second stage would be endeavours are to be made to kick the guy out of China.

I couldn't help but think of this as another show, some how I wish I were not able to read Chinese to learn about the ugly thing. It was even too moronic to be propoganda. It won't do anything good unless to the sudden attention on himself. Later I saw some posts on my frequent forum, where some anonymous guests leave comments which are totally out of blue, such as Shanghainese are so submissive to foreigners. I didn't know any interlink between that comment and the newspaper article. I just know some people just don't like Shanghainese so much that anything that is not considered decently done is done by Shanghainese, more specifically, Shanghai girls.

Why I don't read the UK guy's blog frist before holding an negative view towards the Chinese professor? because I can't access it? Nay. I have got the access to the foresaid blog, thanks to the links posted on China Herald.
It is due to the reason that i don't like the appearance of the Sex And Shanghai (SAS) blog so much that it keeps me from reading any further, despite how juicy the contents might be. Too subjective?  Yea.
A better reason would be- whatever have been blogged there, has little relation to the allegations that the Chinese professor made. The Chinese professor claimed that the SAS blog and the posts therein have severely darnished the reputation and 'image'  of those Chinese girls who have been mentioned in the posts as well as such of all Chinese people. It hurts him that some Chinese girls were played by this UK guy. (might be not the same word as it was based on my memory). How ridiculous. 

This sort of news steals people's eyeball majorly. I am interested in how the media gather their denominator. It happends all the time. Remember the Shanghai bar association wrote a memo to the department of justice on how foreign firms have violated Chinese law and take up too much market share? It didn't expressly say in the memo that the foreign law should be kicked out of China pratice, BUT if the authority decides to do what is proposed in the memo, i guess a lot of law firms got to shut down. (based on some post i read before)  Do you find the resemblance in the two case?

Another thing is I am not sure whether the UK guy has violated any Chinese law, but he might want to check with a lawyer. Especially I am not sure whether blogger.com has a Chinese operation presence and whether they have obtained all the necessary approvals from the authority (very likely though). And whether the girls that he had sex with are all above 14 and were not against their will. Having sex by way of seduction might be considered as rape under Chinese law. Though I don't think it's likely that one of the girls would come out and report to police. Same unlikely he will be really kicked out of China. But just sometimes the press can get devastating in China. Particularly when the society is stil generally conservative about sex. Without saying the Chinese professor and his supporters might be lobbying.
However, it's very unlikey finally, there will be a win-lose situation. For the UK guy,to avoid any form of unwanted trouble, he should start to talke to someone. But rest assured, it's still not that bad. He can make hay out of these ugly things- he can write a book called Sex and Shanghai, subtitle ''how I fight with the stupid China man". Press will want it. Big bucks will flood to his pocket.

All in all, my view towards the whole thing is, even though this is just a show presented by some clowns, it signals the on-going hostile (mixed with hospitality) attitute some Chinese have towards foreigners, and vice versa.

Seperate from above, personally I would feel horrible (cringe actually) if the guy I sleep with last night is blogging about the thing and about myself. Further, as a Shanghai girl, thanks to the SAS blog, we have a more and more prominent, if not too notorious reputation now.

The rule is, you dig it, there will be a story and noices along the way. If just leave it there, it's a non-story.  




  




 

August 17th, 2006

The above-captioned shows my itenerary this morning where I finally found what I've been looking for- the insights on the recent New M&A Rules.

In a nutshell, as Gizmo quoted a Chinese report, the new rules were backed by the protest against the number and pace of Chinese firms being acquired by foreign investors. That's what happened in this year's NPC session.

I am wondering if this kind of top-down rules will ever be reasonable and not funny. To change this and improve the debate level, I can't do anything until I improve myself so much that I become one of the rule-makers.

That's going to be on my list of new year resolution. Aha.

Ok, the foresaid Gizmo post is

here.

August 14th, 2006


The above new law was actually out last week, Aug 8. It was not totally out of blue, yet there've been some buzz going on about its unpredictability.

The Reuters report, as well as Wall Street Journal's, in my view, are both a little off the target. They talked a lot about share swaps, as though they were totally novice.

Entrepreneurs and firms are concerned about the real effect of the new rules: whether the supervision will be more costly both in time and money? and whether several rounds of approval will abort a plan at its final stage? Will the new rules increase risks in reality or it's just a another 'policy'? 

Waiting for an insider's analysis on this.  

Just came across the brief on
All Roads Lead To China blog and it gave 10 out of 10 for its overall impact and opined that hte impact will be spreaded to all industries. 

Whoa.


Ok,  found another one done by Heller Ehrman. I am going to read it. Here.

 

July 31st, 2006


I think the draft new rules show China wants more reins on foreign investment, especially those through swap of shares in the offshore co. and domestic co., whether in a RTO or IPO. The measures are aimed at requiring regulatory fillings, disclosure of the ultimate controller, and imposing a tight timeframe. (see Article 16 and the whole new Chapter 4) 
 
For example, for IPOs, it requires that after a domestic company is taken over (in consideration for shares) by an offshore SPC and consequently being converted to be a FIE, the approval from MOFCOM is only valid for one year. Pratically, the IPO must happen within one year after the business license of FIE is issued. (see Article 42)
 
Another tighten-up is, if a deal is done through swap of share in the offshore and the domestic company, the FIE is not considered FIE anymore and thus can't enjoy FIE preferential policies, eg. 2 years' tax exemption, unless at least 25% of the shares in the FIE are held by the foreign investors, which must NOT be the same people as the PRC Shareholders. (Article 47) 
 
On the other side, for take-over by using the real money, the new rules don't seem to have much attention on it, except it requires disclosure of ultimate controller of the parties to a deal, if the deal involves IPTs such as both the acquirer and acquiree are controlled by the same people etc.(Article 14)

July 25th, 2006

Shush! We're Making Laws

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It was said among lawyers there'd a proposed change in the law pertaining to mergers and acquisitions which, will possibly affect PRC companies who intended to be listed on oversea stock exchanges and take-over pratices, among other things. The amendments were said to have happened by the end of the month, but turned out to be at least later this year, or even by the end of the year.

While I am looking through these amendments (of course, proposed changes), I feel, ok, quite similar to when I was reading the Company Law 2005. A lot more sections. And a lot more detailed provisions. This might be trouble for the law students, professionals to be updated (because the law is always changing!) with the latest position, however, on the other hand, I can see the lawmakers (or more accurately, the drafters of these provisions) are getting better on their job.

The only thing I am not so happy about is, and it's always been a problem in China I guess, that the consultation paper of the bill (so called, because there is NO such thing ever. It;s always a sketchy document circulated among don't know whom) shall be made to public so that various interest groups can get access to what is going on. But this is just a wish. And as we all know, the law making in China is always secretly and quietly done by a small group of people. (then whereelse is not?) It is fine that politians do not want others see the law making, so as the sausages making, because the more interest group get involved, the harder a bill may become the law. 

I am going to post the translation to these provisions, in the next few posts.

July 7th, 2006

Sub Cruce Lumen

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A Germen friend of mine once said Jewish are smarter because they debate a lot and dare to challenge the authority, in response of my argument that Chinese are smarter than Jewish. (I argued, arguendo that either of Jewish and Chinese is the smartest in the world.)

The implication is, Chinese are not used to debating or don't dare to debate with the authority.

It is fairly true in reality, of course his statement is generalization. Besides what he said, Chinese somehow get easily irritated and agitated during a debate (and I am generalizing also).


Don't know why just suddenly thought of this.

Seperately, I am grateful to be reading the comments of the second post on Why China Stagnated, and enjoying the process of the discussion (and maybe, some debating), more than the results that the discussion pointed out.

 

July 6th, 2006

It was reported earlier today that the North Korea's provocative July 4th missile test had shocked Japan and left it "scrambling for a response". 

The missile test was claimed "successful" and North Korea says it will continue launching missiles.

 

Intriguing is what North Korea says in its press release, that the July 4th missile test had nothing to do with the nuclear talks between itself and Japan, US, China etc. (Xinhuanet)

Really?

Taepodong-2, were the "fabled" missiles launched this morning, almost the same time as the American spacecraft.  
It is undertandable that Japan might be the one of more concerns on the issue, simply because one of the Taepodong-2 was only 500 kilometers away from the west coast of Japan before it plunged into the ocean. 

 

July 5th, 2006

Too Proud Of Our Culture?

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Fresh and new article ''Why China Stagnated" from China Law Blog, quoted David Landes, who is an economic historian teaching at Harvard University, that one of the reasons why there was no industrial revolution in China, was because the "ignorant" and "fatal" belief that Chinese state and people bear in mind at any time and at any place that their culture was so superior to others that there was not much to learn from others. 

This quickly reminded me of things happened between me and my friends: I have, not only once, "offended" my friends from other countries by saying "oh you know your [certain culture] is from China". That's why one of my close friends once admitted, in a mocking tone, that ''everything is from China''. 

I blushed at his response, and realized how rude and ''ignorant'' I was- a small example for Prof. Landes' point. But, besides the enlightening part, I can't help wondering, why? Why this kind of thinking is deeply rooted in my and my peer's mind?

Textbooks.

Education.

I can't tell you how many times I have been told, in classrooms, that my state's culture is so superior to others that others are mostly originated from ours.  
History was one of my favorite subjects back then at school, but as I recall, there were only few parts about the modern histroy, where included the industrial revolutions, that had been covered by the textbooks, or it was because I didn't like that part of history and tended to be ''ignorant'' about it? whatever.

The modern history of China is so humiliating that me and my textbooks both might have tried to avoid it. I would think of the great culture we have had and the great prosperity we once had in Tang dynasty, rather than those happened in recent centuries. 

Escaped from reality? Maybe. Ignorant about others' culture? Maybe not.    

There is a quote by a 19th century Chinese political writer, supposedly known to everyone who have attended school, saying that the Chinese should learn the good technology (or technics) from oversea countries to surpass them. The Chinese, realized although they had an impressive coulture, they couldn't turn the table (after being defeated by the British in the Opium War) until they learnt from others.    

At least, for the 19th and 20th century, ignorance might not be the rationale of no existence of industrial revolution. I think it was the inferiority complex resulted from the realistic conditions that had refrained us from learning from others. And plus, the bad luck we had. Very bad luck. 

China was so poor that it had to keep in mind how prosperous and powerful it was. And forgot how bad the situation was at the moment.  So isolated that it blamed everyone but itself, and boosted its culture so ardently that people could forget, among other things, the weak military force and the disheartening per capita.

  

July 4th, 2006

Schumer Bill

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The Schumer Bill were proposed to amend S.600 which authorise appropriations for fiscal year 2006 to 2007. The bill meant to authorize appropriate actions if negotiations with China on its undervalued currency failed, and was later rejected in senate by a Yea-Nay Vote. 33-67 on 4/6/2005.

June 30th, 2006

Useful Link

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Saw the post entitled China Legal Research Guide on my most-frequented blog and referred to this 'incredible' reference to China Law. The guide is well done and worth reading, if you have an interest in knowing China Law. Thanks for sharing China Law Blog. Check it out at here.


National People's Congress approved the Sixth Amendment of Criminal Law of China (draft) on 29 June 2006. You can find it here.

 

Under the amendments, among other things, the penalties for disturbing market order, damaging public interest and business bribery etc have been amended.

 

June 28th, 2006

An Appropriate Reply

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I just read an article written by Dan Harris of the China Law Blog, entitled ''Not Exactly Conterfeit- New Balance Shoe and China's Third Shift", whereby he mentioned:

Clients have asked me if a particular contract provision I am recommending will prevent them from being sued.  I always respond by saying virtually nothing can stop someone from suing them, but a good contract provision can greatly decrease the likelihood of being sued and greatly increase the likelihood of their prevailing quickly in any such lawsuit.  The same holds true in China. 

Just less often. 

 

 

Smart answer. Take notes down.

June 27th, 2006

The Mergers & Acquisitions Provisions ("M& A Provisions") was issued by MOFTEC (now MOFCOM), SAT, SAIC and SAFE on Mar 2003 and took effect on 12 Apr 2003. (can find it at here or here)

A quick brief:-

1) M&A refers to both acquisition by assets and by shares (Article 2);

2) For foreign investments lower than 25%, approval is needed and the laws regarding foreign investment are applicable (Article 5);

3) Post-acquisition rights and liabilities depend on the type of the acquisitions: i) by shares, undertaken by the purchaser; ii) by assets, undertaken, by the vendor (Article 7);

4) The legitimacy of Chinese citizens as parties of FIEs, is recognized*;
(Article 10)

5) Purchase price and its payment are based on the evaluation by certain evaluation body, which is chosen at the discretion of the parties(Article 8);

6) Subject to the industry requirement and the examination-and-approval required for the inflow foreign investments (Artical 15- 17);

7) Examination-and-approval is required for over-concentration in certain industries, for prevention of monopoly.  


* This is because under JV and WFOE laws, Chinese citizens are not allowed to be parties of FIEs.

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