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Huang Caihua, Associate, Foreign Direct Investment

Recently, the Chinese government issued a couple of new laws and regulations to curb overseas “hot” money and strengthen the administration of foreign exchange. On August 5, 2008, the State Council amended and promulgated the Regulations on Foreign Exchange Administration of the People’s Republic of China which requires that foreign exchange and the fund for settlement in a capital account should be used as approved by relevant approval authorities. On August 29, 2008, the Circular of Relevant Implementation Questions Concerning the Improvement of Administration of Payment and Settlement of Foreign Exchange Capital of Foreign Invested Enterprises (the “Circular”) was then issued by the State Administration of Foreign Exchange (“SAFE”), according to which the RMB settled from the capital account of a foreign invested enterprise (“FIE”) should be used in accordance with the business scope approved by the governmental agencies and may not be used to make equity investments in China. This means foreign investors cannot directly make use of the foreign exchange in their capital account to invest in China, which is expected to have a major impact on domestic re-investment by FIEs.
Continue Reading Foreign Exchange Capital: Restrictions on Domestic Investment

Duan Haiyan, associate, Labor & Employment

The Implementation Regulations of the PRC Employment Contract Law, which has been anticipated for over a year, became effective on September 18, 2008. Overall, the Regulations are consistent with the spirit of the Employment Contract Law and resolves certain problems in its implementation. However, the Regulations have a relatively limited impact and failed to meet many expectations.
Continue Reading Employment Contract Law Implementation Regulations: Initial Thoughts

Ting Xu, Associate, Trademark Department

On May 26, 2008, the China Trademark Review and Adjudication Board (“TRAB”) of the State Administration for Industry and Commerce (SAIC) made a decision in favor of Changyu Winery Group, upholding its exclusive use of the mark “cabernet” in Chinese （“解百纳”） as a registered trademark. The decision further found that Changyu established “解百纳”  as one of its trademarks through its use and did not consider “解百纳” the generic name for these cabernet grape varieties.  This means other wineries such as China Great Wall Winery, Dynasty Fine Wines Group Limited and Yantai Weilong Grape Wine Co. are prohibited from using the mark “解百纳”, which may certainly cause damage to these wine makers in marketing their products.
Continue Reading Wine Confusion: Trademark Dispute over Cabernet

The current concerns about the spiking of dairy products in China with melamine have expanded into concerns about the state of Chinese food safety generally.

The problem does not appear to be a lack of regulations as there are a myriad of  relevant laws, regulations and rules (including PRC Food Hygiene Law, PRC Product Quality Law, PRC Agricultural Product Quality Safety Law, PRC Consumer Rights Protection Law, Special State Council Rules on Strengthening Supervision and Management of Food Safety, National Plan for Major Food Safety Emergencies to name a few).

Mark Schaub, Partner, FDI

Continue Reading Milk Mayhem – China Food Safety System in Flux

Finally, it seems that the first light of dawn in a quieter world has been shown to people who have been continuously bombarded by anonymous messages or phone calls via mobile and other communication channels for private tutoring, apartment sales, and insurance.

On the 25th of August 2008, the 4th Conference of the Standing Committee of the 11th National People’s Congress (NPC) deliberated on The 7th Amendment to the PRC Criminal Law (draft). The Draft is the first time a proposal for providing protection of personal information by imposing criminal charges for violations on such information was put forward. This has raised broad public attention at all levels.

Li Yongmei, associate, Domestic Dispute Resolution

Continue Reading Privacy: New Developments in the Protection of Personal Information

The new PRC Enterprise Income Tax Law (“EIT law”) came into effect on January 1, 2008 and consolidated the enterprise income tax regimes for domestic enterprises and foreign-invested enterprises and ended the system of dual income tax regimes. The new EIT law unified the tax rates and tax incentive policies for both domestic enterprises and foreign-invested enterprises so that more equitable market conditions are created.

For those enterprises previously enjoying favorable tax incentives under the former tax regimes, the new EIT law provides a 5-year transitional period. For example, enterprises that enjoyed fixed term tax exemptions and reductions may continue to enjoy them until the end of the original term. Enterprises that used to enjoy a 15% tax rate will gradually shift from the lower rate to the 25% as required by the new EIT law. The transitional tax incentive policies are provided in many different tax regulations. The following is an introduction of some of the transitional tax policies:
 

Stephen Nelson, head of King & Wood’s Taxation Practice & Wu Libin 

Continue Reading Transitional Tax Incentive Policies relating to the Enterprise Income Tax

The First Intermediate Court of Beijing recently issued a landmark decision under the new Labor Mediation and Arbitration Law (effective May 1, 2008). Under the new law, only employees can appeal certain arbitration decisions, while the employer is only able to request the court to vacate arbitration decisions on certain narrow grounds.

Wu Jing, Attorney, Labor & Employment

Continue Reading Labor Arbitration Decision Vacated

Interviewed by Serwat Perwaiz, Editor of King & Wood’s Publication Group

As China’s economic and social presence on electronic forms of communication continues to develop and expand, the country’s regulatory bodies are stepping up to the challenge to keep pace with the new developments. We are lucky to have Dr. Martin Cave, Professor and Director of the Centre for Management under Regulation, Warwick Business School, to provide us his comments on the hot topics of Technology and the Internet.

When asked about his key areas of interest, he commented that he was particularly interested in “reform and liberalisation of the radio spectrum, which can support the amazing growth of voice and broadband wireless technologies we have seen in the past decade.” He went on to discuss how the standard model in Europe and the United States, which “relies on maximising competition and reducing regulation to the minimum, with a relatively small role for government policy and government subsidy” differs significantly from models in Asian countries where “government policy is a much stronger driver.”

Continue Reading Expert Look at Communications Technology: Comments by Dr. Martin Cave

Duncan Hwang, Foreign Lawyer, King & Wood’s FDI Practice

class="MsoNormal" style="margin: 0cm 0cm 0pt">After the Qualified Domestic Institutional Investor scheme (QDII) was implemented in April of 2006 to help relieve pressure on the RMB by promoting capital outflows and Chinese companies in various industries in the private sector were encouraged to go abroad, China’s outbound investment totaled approximately $20 billion in 2007.

 Continue Reading New York: Current Trends Lead to Overseas Expansion

There are Risks in Participating in the Formation of Standards.

On July 8, 2008, when China’s Supreme Court addressed the question raised by the Liao Ning High People’s Court arising from a patent infringement dispute, it stated, “If a patentee participates in the formulation of the Standard or agrees to incorporate its patented technology into the National Standard, the Industrial Standard and/or the Local Standard, it shall be deemed as the patentee authorizing other parties to exploit the patent for the purpose of conforming to the standards. The exploitation by the said parties may not constitute patent infringement as specified under Article 11 of the Patent Law.” 
 

How can this impact your patent in China? 

Xu Jing, Partner at King & Wood’s IP Litigation Practice

Continue Reading China Patent Holders Beware!