Saturday, February 12, 2011

A few new things

First of all, I have to give credit to the outstanding China Law Blog:  This Blog has been publishing about Chinese Business Law since 2006.  It is a truly outstanding blog.It's the first place I'm looking for when it comes to information.

That said, this is an IP-focused blog.  However, when I run across something I think our readers would enjoy, I will make a quick post about it.

First up is this excellent but short article from the WSJ:

The idea is that China needs Coal (they suffered an energy shortage this winter) whereas the USA has come coal mines in the Pacific Northwest.  The first issue is that US ports are not well equipped massive coal shipping.  In China, not only do they have numerous big ports, but they are also promoting more shipping ports - even by TV commercials.    The second issue is the environmental concerns - the local damage to the mining area as well as the global warming concerns.  Environmental damage in the northwestern states has long been an issue, as mining not only destroys the location where it is, but is devastating to water quality downstream.  Secondly, global warming is very real and might be a bigger, long-term concern that is slowly but surely affecting us all.

It is interesting to note that in global climate negotiating simulations, China and India tend to be reluctant to conform to emissions standards due to increased cost.  It is not that they don't care, but rather want to develop their countries first and then worry about emissions.  However, sometimes being green is also being efficient.  For a good talk about green design, see here :

The second Topic today is Guanxi - which is more like business gift giving.  In some extreme cases it is straight-up bribery, but often there is a fine line between that and Chinese business culture.  When I was in China, every time two Chinese groups met, there was an exchange of gifts, or, at least, someone (normally the one with more money) would pick up the tab.  Even broke college students, who might make 1000-2000 CNY a month wouldn't let us pick up are 300 CNY Karaoke tab.  Chinese culture about gifting and receiving and treating to meals, both in a business concept and a social concept is very different.  In fact, if I remember the model ethics rules well enough, what is expected in China could result in disbarment in the USA.

Of course, this helps business get done, but sometimes it can go sour and backfire.  It's both interesting and different, but you can read a good article about it here:

Thirdly and quickly, there was an interesting map about labor unrest in China, seen here:  There's no shock to me that Shenzhen, my wife's hometown, is the hotspot for labor unrest.  Shenzhen is the largest area for factories in China, and also is a huge area for factory towns.  While the workers earn two to three times what they would earn in the country, they work very long hours doing repetitive tasks, live in crowded living conditions, and have high suicide rates.  I have also heard stories where the company locks them in their dorms at night to keep people from escaping, but when there is a fire people can't get out and there are significant fatalities.  These conditions are so bad that they are certainly criminal in the USA, but companies realize that in the US, after benefits, auto workers (for example) might make up to 65$ an hour, complain, leave work early, etc...  Meanwhile, you can pay a Chinese worker 65$ a month, they will put in 12-hour days, be eager to learn and grateful that you are paying them so much, considering income in the country might be 300$ a year.  China says they only have 20,000 people in poverty, but the count poverty as under 600 CNY a year (about 90$)  While it certainly goes further than 90$ does here, it's a pitiful sum for a family income.

The IP topic of the day is a basic "how to" manual for IP in China from IP Dragon:  I recommend people just open it up and read the article, because it is so short and crisp that I don't think I can summarize it better there.

What is interesting is the different methods of enforcement:  Administrative, Customs, Civil and Criminal.

It seems Administrative is quick, low cost, and shuts something down right away.  The problem is there are no damages other than return of goods, and hence it is very easy to open another factory under another name and just keep infringing anyway.

Customs seems interesting - but I have yet to see someone get pulled over for a fake LV bag, though I am certain there are hundreds of faked goods throughout customs.  It seems like a good thing to do, but the amount of counterfeit goods is so high i fear this will be very limited enforcement.

Thirdly there are civil actions in court.  While this might actually award damages, they are (of course) more drawn out and much more expensive.  However, some concerns exist in the Chinese courts, such as "how will judgement be enforced?" and also "can i recover?"  Remember, it does no good to sue someone with no money.  For all you know, the legal fees are more than the recovery.

Lastly there are criminal penalties for IP breeches, which can result in imprisonment or high fines... the problem here is just like the US courts - there is a higher evidentiary burden to meet and the infringer might be good at hiding the ball (or the LV bag) and escape criminal penalties.

It's very interesting, I'd recommend it for a good, quick read for anyone interested in China IP.

Anyway, that's all for today,


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