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

On November 5, 2008, the PRC State Council passed The Provisional Regulations of the People’s Republic of China on Value-Added Tax, extending VAT reforms to all industries nationwide from January 1, 2009.

Stephen Nelson, Partner, Taxation & Alice Zhang, Legal Assistant

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There has been a great deal of media coverage in China in the past weeks regarding the impact of Microsoft’s making available its Windows Genuine Advantage (hereafter, “WGA”) to users with Chinese language versions of Windows operating systems. For users going to Microsoft for many of its software updates (excluding some security updates), a validation is required where WGA would notify the user if unlicensed Microsoft Windows software was found on the user’s computer. Microsoft contends that WGA has been made available to warn users of the presence of unlicensed software and to give them the opportunity to purchase licensed software which would then allow them to have the benefits associated with said software, such as product support and ongoing software updates.

Shi Yusheng, Partner, IP Litigation

Mr. Shi Yusheng has also discussed this issue recently on CCTV - 9's Dialogue

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Under the United Nation's Framework Convention on Climate Change (UNFCCC), “developed country Parties should provide new and additional financial resources to support the transfer of technology and take all practical steps to promote, facilitate and finance the transfer of, or access to, environmentally sound technologies and know how to developing country Parties.” However, a UNFCCC report revealed that a large portion of developing nations do not take advantage of CDM projects to import technology.
 

As long as technology transfer from developed countries is a convenient low-cost means for China to reduce GHG emissions, why doesn't China have more CDM projects that involve technology transfer? [continue reading to see our analysis]
 

Wang Rui, Partner, International Trade

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The Hong Kong Government has decided to introduce a cross-sector competition law during the 2008-09 legislative session. The Government has published a draft framework for the competition law and is currently seeking public comments on this draft.

The introduction of a competition law is a significant step for an economy to take. Not all competition laws are the same and the most important thing is that the law is designed well to suit the Hong Kong economy.

I. Key features of the draft framework paper

A. Competition rules
There are three core prohibitions commonly found in competition laws around the world. These are a prohibition against horizontal coordinated conduct such as price fixing between competitors; a prohibition on an abuse of unilateral market power (sometimes called an abuse of dominance or otherwise called an abuse of a substantial degree of market power); and a prohibition against anticompetitive mergers.

The competition law would contain two broad prohibitions:

• prohibition against undertakings (individuals, companies or other entities engaged in economic activities) entering into agreements, decisions or concerted practices with the purpose or effect of substantially lessening competition (the "First Conduct Rule"); and

• prohibition against undertakings that possess a substantial degree of market power from abusing that power with the purpose or effect of substantially lessening competition (the "Second Conduct Rule").

The Public Consultation Paper also raises the possibility of a prohibition against mergers or acquisitions that are likely to substantially lessen competition (the "Merger Rule") and a clearance process for mergers and acquisitions. If this possibility was not adopted, it would put the Hong Kong competition law out of step with most other competition law regimes around the world.

Also prohibited in some jurisdictions and not in others is certain vertical conduct like resale price maintenance. For example, the competition law on the Mainland contains such a provision. However, in step with recent US case law, Singapore does not prohibit such vertical conduct. The proposed Hong Kong law would follow the latter course.

*Nick Taylor is a partner of Gilbert+Tobin, a strategic partner of King & Wood since November 2007.
**Kenneth Choy is a Partner King & Wood - Hong Kong.

 

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