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By Susan Ning, Liu Jia and Angie Ng

It’s been slightly over a month since the enactment of a national security review (NSR) process for foreign acquisitions of domestic businesses.  Thus far, it is not clear how many (if any at all) foreign-local deals have undergone the NSR process,  Pursuant to the rules and regulations1  which govern the NSR process, there is no obligation on the part of the Chinese government to publish any determinations (whether deals are approved or not) in relation to deals which undergo the NSR process.Continue Reading Local commerce administrative agencies and the national security review process

By Richard W. Wigley and Xu Jing of King & Wood’s Intellectual Property Group

Among the most frequent questions posed by overseas corporate counsel overseeing litigation involving their companies in P.R.C. courts are those questions relating to evidence collection. For the attorneys from the United States, those questions will often focus upon the "discovery" practices of P.R.C. courts. As they come from a litigation environment which often has liberal discovery options, it often comes as a surprise to foreign attorneys – especially U.S. attorneys – that the P.R.C. legal system has no direct equivalent to U.S.-style discovery practices. Collecting the required evidence in support of litigation in the P.R.C. is subject to very different guidelines from those guidelines of many foreign jurisdictions. This article will take a very brief look at evidence collection practices in the P.R.C. and offer some potential alternatives in the P.R.C. to "discovery" practices.Continue Reading Evidence Collection and Alternatives to “Discovery” in P.R.C. Litigation

By Susan Ning, Huang Jing and Angie Ng

 

We understand from press reports that the China Automobile Dealers Association (CADA) has complained that a large automobile manufacturer has allegedly been imposing unreasonable restraints on its distributors, including determining a minimum resale price and allocating territory.  There has been some suggestion in the press that the conduct allegedly undertaken by the automobile manufacturer is in breach of the Anti-Monopoly Law (AML).

 

This article identifies the AML provision governing such vertical restraints; and also outlines how certain vertical restraints in relation to the motor industry are being dealt with in Europe.Continue Reading Complaint re resale price maintenance in the automobile industry

By Susan Ning, Yin Ranran and Angie Ng

An instant noodle manufacturer recently announced that it decided to increase prices for its "container instant noodle" (referring to both instant noodles packaged into a variety of "cup-like" or rectangular containers) from 1 April 2011. In China, this instant noodle manufacturer is considered one of the leading brands in relation to the instant noodle industry.  According to press reports, the instant noodle manufacturer has announced that due to increased transportation and raw materials (e.g. flour and palm oil) costs, it intends to raise the prices for most of its container instant noodles to RMB 0.5 per unit – this amounts to an increase of between 10% to 15% from current prices. [Note:  In the past month, several manufacturers of household and daily care products also made announcements that they were intending to increase prices of specified products due to an increase in price in raw materials.  See our article entitled Price Hikes for Washing Powders, Soaps and Shampoos expected in AprilContinue Reading Businesses Should Be Cautious in Making Advance Price Increase Announcement

By Susan Ning, Yin Ranran, and Angie Ng

Recently, there has been a flurry of press reports on the proposed price increases by several major manufacturers of household and personal care products, including multinationals such as Procter & Gamble and Unilever, as well as domestic manufacturers such as "Liby" and "Nice".  Pursuant to the press reports, all four manufacturers mentioned above have separately announced that the retail prices for their respective brands of washing agents (including washing powders, soaps and shampoos) will increase by as much as 10% commencing from early April 2011.  Commentators have said that this is the largest price hike that they have seen in relation to the household and personal care products industry, in the past 3 years. Continue Reading Price Hikes for Washing Powders, Soaps and Shampoos Expected in April

By Susan Ning, Shan Lining and Angie Ng

The radiation leaks in Japan’s Fukushima Daiichi nuclear plant (caused by the earthquake-tsunami in Japan on 11 March) has made consumers in China paranoid about the salt they will consume in the near future.  Once news of the leak in the nuclear plant broke, there was a mad "scramble" to purchase table salt – as Chinese consumers were concerned that in the near future, the sea water around China would be contaminated as a result of the radiation leakage.  According to press reports, around the same time, some table salt retailers proceeded to raise the retail prices of iodized table salt.

The Chinese Government controls prices in relation to table salt.  Specifically, the ex-works and wholesale prices of table salt are set by the National Development and Reform Commission (NDRC, the central price authority); in addition provincial price authorities also control to some extent, the retail prices of salt.  In some provinces, provincial price authorities set maximum retail prices – this means that table salt retailers are not to charge above a price set by these authorities.Continue Reading Salt Price Hikes Curbed by the Price Law

By Susan Ning, Huang Jing and Shan Lining

On March 4 2011, just one day before the implementation of the national security review mechanism1, the Ministry of Commerce (MOFCOM) released the MOFCOM Interim Rules for Implementation (Interim Rules). These Interim Rules came into effect on 5 March and are set to expire on 31 August 2011.

The Interim Rules provide more details in relation to how the national security review process is initiated, documents to be submitted and more details the initiation of a national security review, the required documents, and the review decisions.
 Continue Reading MOFCOM issues national security review interim rules

By Susan Ning, Yin Ranran, Huang Jing

There have been concerns about Chinese government’s foreign investment policy ever since the State Council announced the formal establishment of the national security review ("NSR") regime in China.  At a press conference of the Fourth Session of the 11th National People’s Congress held on March 7, 2011, China’s Minister of Commerce Chen Deming reiterated that China’s "opening-up" policy will remain unchanged.  According to Chen, whereas China is in the process of further opening up to the world, introducing the NSR regime ensures that national security concerns will be addressed in a transparent manner and it is in line with international practice. 

The NSR regime is not particular to China.  The United States first instituted the NSR process in the 1980s.  Other jurisdictions, such as Australia, Germany, Canada, also have similar processes (see our article entitled More on China’s national security review regime – the American regime vs the Chinese regime).  Through our research, we find that during the past few years, the following contemplated outbound investments by Chinese companies underwent the NSR process:Continue Reading List of Outbound Investments by Chinese Companies Scrutinized for National Security Concerns

By Yuan Min, Wang Jianzhao , and Kirby Carder, King & Wood Insurance Department, Beijing Office

Last Sunday during a press conference held during the National People’s Congress, China Insurance Regulatory Commission (CIRC) Chairman Wu Dingfu announced that the CIRC is currently creating its policy for the use of insurance premium funds to invest government subsidized affordable housing projects. He specifically stated that China does not have a legal barrier to insurance companies investing insurance funds in affordable housing projects, and he also said that the CIRC plans making Shanghai the first city where this is possible. However, he cautioned that the main priority in insurance fund investment must still be risk management because any investments must provide a return so that an insurance company’s duty to pay its policyholders claims can be met.Continue Reading The China Insurance Regulatory Commission has Announced that it will Pilot Allowing Insurance Funds to Invested in Affordable Housing Development Projects in Shanghai

By Yuan Min, Wang Jianzhao , and Kirby Carder, King & Wood Insurance Department, Beijing Office

During a press conference held last week during the National People’s Congress, China Insurance Regulatory Commission (CIRC) Chairman Wu Dingfu annouced that the the CIRC will set up an insurance exchange in Shanghai as part of the Chinese government’s goal of making Shanghai an international finance center. This official announcement shows that the CIRC is serious about setting up an exchange. Yet, at present this announcement probably should just be considered a statement of their intentions because the CIRC did not offer any details on what the purpose of that exchange will be or who will participate in that exchange.Continue Reading The China Insurance Regulatory Commission has Announced that it will Create a Pilot Insurance Exchange Project in Shanghai