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By XU Ping and XIONG  Jin King & Wood Mallesons’ Corporate Group

Introduction

In the strong spirit of reform as enshrined in those key policy documents promulgated at the close of the Third Plenary Session of the Eighteenth Congress of the Communist Party of China’s Central Committee, the State Council promulgated on the 2th December 2013, the “Catalogue of Investment Projects Subject to Governmental Verifications (2013)（《政府核准的投资项目目录（2013年本））” (“2013 Catalogue”) [1], with a view to promoting the “reduction and decentralization, to the greatest extent possible, of verification powers to truly implement the investment decision-making power of enterprises”.
Continue Reading Catalogue of Investment Projects Subject to Governmental Verifications (2013) Overhauls Chinese Outbound Investment Regulatory Regime

By Miao Jing King & Wood Mallesons M&A

As anticipated in our Client Alert1 dated August 2013, the National Development and Reform Commission (“NDRC”) has proposed amendments to the Coal Trading Measures2 (“Amendments”)3.  It has invited companies and individuals to comment on the Amendments before December 17, 2013.4  The Amendments finalize the changes made to the Coal Industry Law5 in June 2013 to remove the need for coal trading licenses (煤炭经营许可证).  In addition, the Amendments propose a number of other changes to the Coal Trading Measures, which are described in more detail below.
Continue Reading Calling Public Opinion on Amendments to Coal Trading Measures

By Manuela Finger 

Introduction

Germany is traditionally one of the most important markets for Chinese companies when it comes to IP. The number of Chinese companies targeting Germany to procure technology or to undertake M&A transactions is constantly increasing.

At the same time, the German IP enforcement system is having a considerable impact on doing business in Germany. On the one hand, it provides an efficient tool for rights owners while, on the other, the expeditious German enforcement system can have a severe commercial impact on newcomers to the market who may suffer in exhibitions in Germany from actions of rights owners. There are even court cases between Chinese companies and between other multinational companies that take place in Germany, possibly due to Germany’s IP enforcement system being recognised as effective and efficient. This brings both advantages and risks.

This article explains the German IP enforcement system and the most important aspects that both rights owners and potential defendants in IP disputes should consider when conducting IP-related business in Germany.
Continue Reading Doing IP in Germany – Advantages and Risks of the German IP Enforcement System

By Liu Cheng Swita Gan Yu Zhenzhen King&Wood Mallesons’ M&A Group

S001ince the Anti-monopoly Law of the People’s Republic of China[1] (“AML”) came into effect, there has been much debate about the circumstances in which minimum resale price maintenance (“RPM”) will constitute a vertical monopolistic agreement prohibited by Article 14 of the AML. In the debate, the most contentious issue is whether RPM should be regarded as per se illegal or if the “rule of reason” doctrine[2] should be adopted to assess on a case-by-case basis, whether the RPM is illegal.

In reviewing the AML, it can be seen that RPM is one kind of vertical monopolistic agreement, as categorized by Article 14 of the AML. Article 13 of the AML defines monopolistic agreements as “agreements, decisions or other concerted practices that eliminate or restrict competition”. This definition apparently covers vertical monopolistic agreements listed in Article 14. However, opinions differ when it comes to assessing the illegality of RPM. The different opinions can be simplified into two distinct lines of thought: (i) whether the act of RPM is a monopolistic agreement that eliminates or restricts competition definitely with no need to further decide its effect on competition (i.e. to adopt the per se illegal rule) or (ii) whether the act of RPM itself should not be deemed as illegal and a rule of reason approach should be adopted to comprehensively evaluate its effect on market competition, to determine whether or not it constitutes an illegal monopolistic agreement.
Continue Reading Still Unclear Path Forward – Resale Price Maintenance under the AML and Recommendations for Companies

by Wang Rui and Qiu Shaolin King & Wood Mallesons’ M&A Group

Introduction

Cloud computing has become quite a hot topic for discussion over the past few years. However, although recent interest in cloud computing has increased, it is not a completely new type of service. For example, when you send an email through Gmail, or store pictures on social media websites, you are using cloud computing services.

In China, cloud computing services has experienced fast and dynamic growth in recent years. The market value of China’s public cloud computing services for the year of 2012 increased by 73 per cent compared to 2011, and the estimated market value for 2013 is expected to reach RMB 6.3 billion.[1] The growth of China’s cloud computing industry has aroused great interest among foreign service providers. In May 2013, Microsoft Corporation announced that it would add several thousand employees to its work force in China as part of a long-term investment in the cloud computing market. [2] However, since foreign investment in the Chinese cloud computing industry is restricted, there are concerns about the short and long term benefits of foreign investment due to the limited participation of foreign investors in the market.[3]Continue Reading CLOUD COMPUTING: KEY TELECOMMUNICATION REGULATORY ISSUES FOR FOREIGN SERVICE PROVIDERS IN CHINA

By Liu Xiangwen, Monique Carroll and Zhu Yuanyuan King & Wood Mallesons’ Dispute Resolution Group

Much has been written on bribery and corruption in China, including the differences between criminal bribery and commercial bribery, and of course, the need for an effective compliance programme. However, foreign companies operating in certain complex or sensitive industries in China need to do more than instil an anti-corruption policy. What is needed is an in-depth understanding of the unique legal environment in their industries. This is because in some industries, particular conduct or business models permitted elsewhere, may be very sensitive and considered bribery or corruption. We recommend that companies operating in China adapt their compliance programme to account for industry specific regulations and sensitivities and undertake regular internal compliance audits as a check on the effectiveness of the compliance programme and to ensure that it remains up-to-date.
Continue Reading What does an Effective Anti-bribery and Corruption Programme Require?

By Richard W. Wigley King & Wood Mallesons’ IP Litigation  Group

China is now believed to be the world’s largest online marketplace[1], as well as quickly gaining on the U.S. as the country with the largest overall retail marketplace[2]. This growing retail marketplace, both for traditional “bricks and mortar” retailers as well as online retailers, presents both great opportunities and challenges.  Chinese consumers are becoming increasingly demanding in terms of product quality, as well as at the same time increasingly transitioning from being traditional “bricks and mortar” retail consumers to online shoppers. These consumers have demanded certain protections when making purchases and, as expected, have often resorted to administrative authorities or the Chinese judicial system to seek protections of their rights, as well as compensation where appropriate.
Continue Reading China’s Revised Consumer Rights Protection Law “Raises the Bar” for both “Bricks and Mortar” Retailers and Online Retailers

By Jack Wang, Chen Yun  King & Wood Mallesons’ Banking Regulation & Compliance Group

In the midst of its rapid economic development, the People’s Republic of China (PRC), the second largest economy and the largest trading nation in the world, has finally determined to change its domestic currency market, which used to be pretty much closed to foreign investors over a long period of time and accordingly, promulgated a series of laws and regulations to ease the previously tight foreign exchange (FX) control in the mainland. These laws and regulations were put in place to propel the internationalisation of Chinese Renminbi (RMB) by expanding the use of RMB under both current and capital accounts for the purpose of ultimately achieving an international status for the RMB matching the economic status of the PRC in the global economy. This chapter endeavours to outline a legislative landscape of RMB internationalisation from the following main aspects:
Continue Reading The PRC Legislative Landscape for RMB Internationalisation

By Liu Xiangwen, Monique Carrroll, Yang Jianyuan and Zhu Yuanyuan

The ‘why’

Due to the sensitivity of commercial bribery, corporations can be reluctant to instigate internal anti-commercial bribery investigations as a check on the effectiveness of their compliance program. Often an internal investigation will only be commenced when a serious problem emerges in the internal management system, a judicial or governmental investigation is initiated or a complaint is received accusing the corporation of serious compliance issues. However, given the increasing global focus on anti-bribery and corruption compliance, the value of regular internal compliance investigations or ‘audits’ has increased. The objective of a compliance audit is to identify and deal with any problems or risk areas before they are obvious to third parties and escalate to the media’s attention. Where the audit uncovers a serious problem that must be reported to regulators, the company will be in a much better position to pro-actively manage the situation – hopefully with the result of minimizing any penalties imposed on the company.

Over the medium to long term, regular compliance audits will strengthen the compliance and risk awareness of both the company and its employees and therefore contribute to an enterprise culture of compliance. Such a culture would in turn contribute to the long-term and sustainable development of the company.
Continue Reading Internal Compliance Audits – the Why and How?