countzero's blog

China: Too different for us to be able to understand? Michael Sylvester

The whole idea behind the name at the top of the page you are reading, Flaming Hoops, has for almost ten years, tried to point out that yes there are some odd twists and turns that we need to remain mindful of here in Mainland China -- but that there is a clean, clear and preditable way to operate here with as much security as you can in any other jurisdiction in the world.   Really.
However, there seems to be a genius of a speical sort among many of the partners, agents, friends and associates here in China that our clients do business with.  Namely, that many Chinese use the fact that things here are differnt to try to convice us that China is too complicated, murky and unknowable -- and that we should just leave it to them to take care of the China side of our business.  For a fee, a percentage, for some amount of equity or control.  Bunk, I say.
Sure, it's hard -- (and if it was easy to make money everybody would be doing it).  

China's Social Insurance Regulations are Unfair?? Michael Sylvester

While I have no desire to pay another USD 5,000 a year for the right to do business here either, I simply can not agree with the wrath and negative reactions coming from our clients that now have to buy social security for their foreign employees in China.  I'm one, and have to pay too folks.
But, the last time I checked all workers in the United States and just about every other Western coutnry are required to pay into the social welfare system of the country in which they are working.  So, if a Chinese National works in New York they, of course, have to pay state and local taxes and all SSI contributions just like we do as US Citizens.
So, why should it be different that we have to do the same while resident in their country?  Just because it has not been like that here before?  Because we, as foreigners, have gotten used to the ex-patriot life and the fact that, historically, the law was applied to us differently to entice our companies into setting up operations here?

Anything goes wrong, anything at all...

images.jpgA 1971 John Wayne movie, Big Jake, has in my opinion, one of the greatest movie lines of all times -- "Now you understand.  Anything goes wrong, anything at all...your fault, my fault, nobody's don't matter...I'm gonna blow your head off.  It's a simple as that."

And while I understand the context of the statement and the sentiment behind it, I am not sure that kind of approch is going to get anyone very far today. And that makes the thoughts raised in my mind worth a scribble or two here

China's Peaceful Development

The People's Daily released the full text of White Paper on China's Peaceful Development a few hours ago.  It is worth a read, folks.
If the idea is to 'lead, follow or get out of the way' it seems China is choosing to do all three at the same time depending on what they are dealing with at any given moment.  
We might all do well to consider the same strategy, for there is no one right answer.  Or ever was.

Sending plans and designs to China: Yes, you can you protect them

designs.jpgClearly, if you make your living on your intellectual property as embedded in your plans, designs and specialized tooling and you do business internationally, you should be filing all your trademarks and patents in all jurisdictions where you make/sell products.   

But, this post looks to a more basic set of concerns on how to ensure that your long term ownership in plans, designs, molds and tools is also protected and under contract here in Mainland China.  For many companies pay their IP counsel lots of money, but forget the basics when it comes to where their molds/ tools are -- and who owns them.

Historically, a Chinese company would agree to make a run of, say, two million widgets, to your plans and designs, and no special contracts would be made out on who would be paying for all molds and tooling.  In many cases a contract would say, in English, that you would own the tooling after so many millions of pieces were run on those molds/tools.  Sound familiar?

China: 'Ant Tribes' Face Eviction from Colonies

ant colony.jpgAs if it was not hard enough to get ahead in the world as a young and inexperienced college graduate in modern China, the Ant Tribes of China are now faced with new government regulations to evict them from their 'colonies' too.

Already modest one or two bedroom apartments that have been partitioned into a series of 25-35 cubic foot 'capsule apartments' are a common first residence for many new urban immigrations all over China and are known as colonies. 

If you are a Chinese university graduate born in the 1980's, working an unstable job that pays less than RMB 2,000 per month, living in a shared RMB 350 apartment and spending over two hours a day travelling to and from work, then you are officially an "ant."  Welcome to the ant tribe.

Chinese Registration of Copyright Pledges


The Measures for the Registration of Copyright Pledge (hereinafter the “Measures”) were promulgated by the State Copyright Bureau and will be implemented as of January 1st, 2011. The Measures for the Registration of Copyright Pledge Contracts promulgated by the State Copyright Bureau in 1996 were abolished at the same time. This is another amendment to the pledge of intellectual property rights since the promulgation of the Measures for the Registration of Patent Right Pledge in October 2010.

According to the relevant statistics, altogether 934 copyright pledges have been registered at the State Copyright Protection Center, from 2000 to August 2010, among which 747 are for copyrights of computer software and the remaining 187 are for the copyrights of general works.

Doing business in Shenzhen is getting easier By: Jane Lai


FOREIGN investors are now allowed to acquire full ownership of Shenzhen companies owned by Chinese, while Chinese are allowed to set up a high-tech enterprise with foreign individuals or corporations, according to policies released by the city market supervision administration yesterday.
    To respond to the municipal government’s call to accelerate economic upgrading, the administration had formulated 28 policies to make it easier for entrepreneurs to do business in Shenzhen.
    One of the highlights of the policies was to encourage the optimization of foreign investment structures and boost the development of Sino-foreign joint ventures.

Shenzhen Housing Provident Fund

taxes.jpgAfter about 20 years of not following the Central Government authority regulations on Housing Provident Funds, the Shenzhen Government is now following the National Law, sort of...

Everywhere else in China, for as long as we have been here, employers have been required to pay 13% of any workers salary to what is known here as the Housing Provident Fund.  In short, this means that you paid 13% of a worker's salary into a pooled account and that person is allowed to draw down and use those funds to help make the down payment when buying a house    

Is winning in a Chinese court possible? Of course it is...

gavel.jpgIs winning in a Chinese court possible?  Yes, of course.  We managed it again today after a three judge panel was called to hear the political aspects of one of our most recent appeals victories.  It took a while, just over a year, which is not really that long when it comes to trial calendaring and such, but honest to goodness justice was done.  Amen.

A client was sued last November for just under USD 900,000 in an absurd and highly charged case that ended up on television and the media way more than we like.  Part of our ability to get things done here is to play by the rules and keep our heads down - but if you follow the in court protocols and you were following the law before you got dragged into court in the first place -- you can walk away with a clean and clear victory.

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