China Law Insight : China Law Insight: China Commercial and Intellectual Property Lawyers and Attorneys, Full Service Law Firm: King & Wood

To echo the enactment of the PRC Property Law, the State Administration of Industry and Commerce in October 2007 published the Movables Mortgage Registration Measures (“Measures”). The Measures, which have replaced the 1995 Enterprise Movables Mortgage Registration and Administration Measures, are aimed at reflect the Property Law’s intention to throw more movables into the pool of mortgage-able properties and to direct local bureaus of industry and commerce on the procedures of movable mortgage registrations. Detailing on the scope of movables subject to mortgages, the effect of mortgage registrations, the documents required to support registrations and the standard of document examination, the Measures are expected to clarify many of the confusions that have impeded the efficiency of the security registration system in China and to enhance availability of financing to small and mid-sized companies.
 

By Li Jinnan, Partner and Pan Ye, associate.

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By:Liu Zhigang, Partner and Lv Yinghao, associate, King & Wood's Banking Department

In the final quarter of 2007, the National Association of Financial Market Institutional Investors (“NAFMII”) was authorized by the People's Bank of China to release a standardized Master Agreement and supplements (“Master Agreement”) to serve as uniform documentation of inter-bank market participants in financial derivatives transactions. For those familiar with the International Swaps and Derivates Association Master Agreement (“ISDA Agreement”), its influence is evident in the newly adopted Master Agreement. Similar to the ISDA Agreement, the Master Agreement addresses an extremely wide variety of transactions, including most if not all derivatives allowed by Chinese law.

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By: Mark Schaub, Partner Shanghai Office of King & Wood，Corporate Group

Despite 30 years of opening up, actual Chinese government policy remains opaque. Although not as incomprehensible to the outsider as Kremlin watching was in the Cold War there are still few opportunities to really grasp what type of foreign investment is actually in favor at any given time. Circular 57, also known as Catalogue for the Guidance of Foreign Investment Industries (“Catalogue”) was overhauled late last year and does provide some hints in this regard.

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By: Huang Tao, Partner and Dai Yue , an associate of King & Wood'sDispute Resolution Group in Beijing.

Lacking knowledge of and exposure to China's judicial and arbitrational system, foreign companies usually worry about dispute resolution clauses more than any other clause in a contract. Deciding which arbitration tribunal and what arbitration rules to specify becomes a sensitive and important aspect of contract negotiations for wholly foreign owned entities ("WOFE") and cooperative joint ventures ("CJV").

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Ding Liang, a counsel to King & Wood's International Trade Group in Beijing

A non-compete clause prohibits one party from competing in the same type of business as the other party for a specified period. The non-compete clause is usually termed "covenant not to compete", "restrictive covenant", or "non-compete clause" and are treated with suspicion by the Anti-Monopoly Enforcement Agency.

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By: Li Qiang, Partner

On March 13, 2008, the General Office of the State Council promulgated the Opinions of the General Office of the State Council on Implementing Some Policies and Measures for Accelerating the Development of the Utility Sector. (No.11 [2008] of the General Office of the State Council) In this opinion, it is clearly stated that “The market-oriented reform of municipal public utilities may be promoted continuously and stably. The operations of water, heat and gas supply, public transportation, sewage disposal and waste disposal, etc. may be entrusted to private enterprises.” This article ended the long-lasting controversy of “whether China’s water market will continue to open up”.

China now is facing a very serious water shortage, and the water consumption and water demand between districts is uneven. As China’s water market keeps on opening up, it is believed that more and more investors will put their money on the exploration and utilization of water resources.

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By Zhang Tianhui, Editor, King & Wood's Publication Group

As China's economy continues to develop, the administration of developments in urban and rural areas of China requires a more focused approach to ensure the harmonious development of each area's economy along with the preservation of local culture, heritage and infrastructure needs. The new system provides localities with guidelines to ensure nationwide consistency while providing a certain amount of autonomy to allow for specific local needs.

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Written By Yang Hongjun, Partner

The recent decision by the Beijing Higher People's Court revoking the Patent Reexamination Board (PRB) invalidation Decision of Pfizer's Viagra Patent in China has put an indefinite end to a drawn out battle between domestic drug companies and Pfizer. This case, while not firmly establishing any foundation for patent examinations, has revealed many of the risks associated for all parties in proceeding into a legal dispute regarding patents in China.

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