Contents
Forewordxxxi
About the Authorxxxiii
List of Abbreviationsxxxv
Chapter 1
Introduction:
Trade, Politics, and Development
of the Law in China
1
A. China/WTO Agreements 7
1. China's Commitment: Tariff Reductions7
2. China's Commitment: Market Access for Services7
a. Automobiles and Automotive Industry9
b. Banking and Financial Institutions9
c. Construction and Engineering10
d. Distribution, Trading Rights, and Retail Services10
e. Health Care: Medical and Dental Services11
f. Insurance Services11
g. Foreign-Produced Films12
h. Pharmaceuticals12
i. Professional Services: Law Firms and Accounting Firms12
j. Telecommunications Services12
3. China's Commitments: Treaty Obligations13
a. Agreements on Trade in Goods13
b. Agreements on Trade Facilitation13
c. Protocol of Accession: Matters Specific to China14
(1) Administration of the Trade Regime14
(2) Nondiscrimination15
(3) Non-Tariff Barriers15
(4) Price Controls16
(5) Subsidies16
(6) Taxes on Imports and Exports16
(7) Technical Barriers to Trade17
(8) Right to Trade17
B. China's WTO Compliance Record17
C. U.S./China Trade and Political Relations19
1. Valuation of the Renminbi: Chinese Currency Issue20
2. U.S./China Trade Deficit22
D. Political Reform, Participatory Government, and Law Reform 23
Chapter 2
Development of the Chinese Legal System31
A. Philosophical Influences of Chinese Law32
1. Confucianism32
2. Daoism34
3. Legalism35
B. External
Influences on the Development
of Contemporary Chinese Law
37
1. Extraterritorial
Privileges and Foreign Demands
for Legal Reform
37
2. Marxism-Leninism
and Mao Zedong Thought
and the Development of Chinese Law
46
3. Influence of Foreign Investment Post-197849
Chapter 3
Legislating, the Judiciary, and Lawyers in China51
A. Legislative Institutions 52
1. National People's Congress52
2. President of the PRC 55
3. State Council 55
a. Ministry of Commerce57
b. Ministry of Information Industry57
c. Ministry of Labor and Social Security58
d. Ministry of Education/Ministry of Science and Technology58
e. Ministry of Land and Natural Resources58
f. State Environmental Protection Administration58
g. State Development Planning Commission58
h. State Drug Administration59
i. State Asset Regulatory Commission59
j. China Banking Regulatory Commission59
k. Ministries/Commissions Reduced in Status59
4. Local People's Congresses 59
5. Language and the Hierarchy of the Law60
6. Review of the Legislative Process 61
B. Judicial System64
1. Supreme People's Court 64
2. People's Procuratorates 66
3. Legal Profession 66
4. Rule of Law in China 70
Chapter 4
FIE Organizational Structure and Approval Procedures75
A. Operations without Partners 75
1. Representative Office76
2. Wholly Foreign-Owned Enterprise78
a. General Principles 78
b. Application Procedures for WFOEs81
c. Investment Contributions for WFOEs83
d. WFOE Operational Issues86
B. Operations Involving Chinese Partners89
1. Joint Venture Enterprises (JV) 90
a. Profit Distribution 91
b. Management Structure91
(1) Unanimous Approval Items92
(2) Deadlock Resolution94
c. Contributions94
(1) Valuation of Capital Contributions95
(2) Timing of Capital Contributions96
(3) Loans97
d. Technology Transfer98
e. Land-Use Rights98
(1) Purchase of Transferable Land-Use Rights99
(2) Lease Arrangement99
(3) Nontransferable Land-Use Rights99
f. Special Issues in Contract Negotiations100
(1) Buy-Out Provisions100
(2) Relationship with Chinese Party100
(3) Obligations of the Parties101
(4) Termination Events101
(5) Choice of Law and Dispute Resolution102
g. Use of Form JV Contracts102
2. Equity Joint Venture Trading Company103
3. Partnership Enterprise 106
a. Partnership Contract and Approval Procedures107
b. Partnership Property and Partner Contribution108
c. Management of Partnership Affairs110
C. Special Function Operations 111
1. Processing Trade Contract111
2. Maintenance and Technical Service Operations112
3. Branch Offices 113
4. Holding Company 114
5. Foreign-Invested
Venture Capital
Investment Enterprises (FIVCE)
120
6. BOT: Build, Operate, and Transfer125
7. FIE Research and Development (R&D) Centers125
D. Equity Investments 128
1. Company Law 129
a. Limited Liability Company129
b. Company Limited by Shares130
2. Equity Investment in an SOE131
E. Procedures for Establishment of a Foreign-Invested Enterprise133
1. Articles of Association 136
2. Feasibility Study 137
F. Assignment of
Investor Interests and Modification
to Capital Contributions
138
1. Assignment and Transfer138
2. Adjustments to Capital Contributions140
G. Special Rules for Headquarter Operations141
Chapter 5
Foreign
Investment Guidelines
and Industry-Specific Regulations
149
A. Catalogue Guiding Foreign Investment149
B. Regulation of the Services Sector151
1. Accountants and Accounting Firms151
2. Advertising Agencies153
3. Asset Appraisal Enterprises 153
4. Chambers of Commerce and International Foundations154
5. Construction Industry155
6. Convention and Exhibition Companies157
7. Direct Marketing Operations 158
8. Educational Institutions and Certification Organizations158
9. Employment Agencies160
10. Entertainment: Films, Radio, and Television160
a. Film Co-Production 161
b. Importing/Distributing Foreign Films163
c. Foreign Investment in Theater Construction/Management163
d. Production/Importation of Audio-Visual Products164
e. Broadcasting and Television165
11. Express Mail and Package Delivery Companies167
12. Financial Institutions 167
13. Franchise,
Retail, Wholesale, and Commission-Based
Agency Operations
168
14. Freight
Transport Agencies, Logistics Enterprises, Ocean
Shipping, and Railway Cargo Transportation174
(a) Freight Transport Agencies and Logistics Enterprises174
(b) Ocean Shipping 178
(c) Railway Cargo Transportation180
15. Hospitals and Clinics181
16. Insurance181
17. Journalists and Foreign News Agencies181
18. Lawyers and Law Firms182
19. Leasing Companies 185
20. Procurement Centers 187
21. Securities Brokerage and Underwriting187
22. Travel Agencies and Tour Operators187
C. Regulation of Technology, Industrial, and Manufacturing Sectors189
1. Automotive Industry 189
2. Aviation and Airport Infrastructure Development189
3. Energy and Power Generation191
4. Mineral Resources Exploration and Exploitation191
5. Petroleum Exploration and Exploitation192
6. Port Administration and Infrastructure Development193
7. Production and Manufacturing Activities194
8. Publishing194
Chapter 6
Information
Technology, Telecommunications,
and Software Development
197
A. Telecommunications and Internet200
1. Permit Procedures for Telecommunication Services200
2. Telecommunication Internetwork Connection203
3. Fees for Telecom Services204
4. Telecommunication Resources and User Fees205
5. Standards for Telecom Service Operators and Users205
6. Telecommunication Construction207
7. Permits for Telecommunication Terminal Equipment208
8. Telecommunication Security Standards209
9. Penalties212
10. FIE Telecom Regulations213
11. Regulation of the Intranet217
12. Regulation of Internet Operations218
a. Internet Information Services218
b. Internet Publishing 223
c. Regulation of Internet Cafés226
d. Anti-Spam Standards227
13. Domain Name Registration in China228
B. Software Enterprises and Software Products229
1. Policies to Encourage Software Enterprises229
2. Standards for Key Software Enterprises231
3. Software Product Standards and Regulation234
a. Registration of Software Products235
b. Manufacture of Software Products236
c. Sale of Software Products236
d. Encryption and Security Product Regulations237
C. Integrated Circuits Industry 240
Chapter 7
Contract Law 247
A. Contract Law249
1. Contract Formation 250
2. Validity of Contracts 256
3. Performance of Contracts257
4. Amendment and Assignment of Contract260
5. Termination of Contract260
6. Remedies for Breach261
7. Choice of Law/Forum263
8. Statute of Limitations 264
B. Specialized Contracts 265
1. Purchase and Sales of Goods Contracts266
2. Electricity,
Water, Gas, and Heat Power Supply
and Usage Contracts
270
3. Loan Contracts271
4. Lease Contracts 272
5. Finance Lease Contracts 274
6. Contracts for Hire of Work275
7. Construction Project Contracts277
8. Agency Contracts 279
9. Technology Contracts280
a. Technology Development Contracts283
b. Technology Transfer Contracts284
c. Technical
Consulting Contracts and Technical Service
Contracts
286
d. Technology Import Registration Procedures287
e. Tort Claims for
Misuse of Technology Subject to
Contract
289
10. Foreign Trade Agency Contracts290
11. Insurance Contracts 292
C. Secured Interests Contracts 292
1. Guarantee293
a. Relationship between Guarantee and Guarantor293
b. Guarantee Contract294
c. Liability for Breach of Guarantee295
2. Mortgage297
a. Mortgage and Mortgaged Property297
b. Mortgage Contract and Registration Procedures299
c. Mortgage Rights300
d. Satisfaction of Mortgagee-Creditor's Claims300
3. Pledge Contracts 302
a. Pledge of Movable Property302
b. Pledge of Title303
4. Lien Contract 304
5. Deposit305
Chapter 8
Tender Law and Government Procurement307
A. Tender Law309
1. Tendering Methods 312
2. Submission of Tenders316
3. Tendering Agents 318
4. Evaluation of Tender Proposals and Contract Awards319
B. Government Procurement Law324
1. Government Procurement Procedures327
2. Supplier Contracts 329
3. Appeals, Inquiries, and Complaints330
4. Legal Liability and Penalties 331
Chapter 9
Taxation Law 335
A. Turnover Taxes336
1. Business Tax 337
a. Scope of Taxation337
b. Exclusions from Business Tax Turnover338
c. Exemptions from Business Tax339
d. Payment of Business Tax339
2. Value-Added Tax340
a. Scope of VAT340
b. VAT Exemptions and Reductions341
c. Payment of VAT343
3. Consumption Tax345
B. Foreign Enterprise Tax 346
C. Tax Issues for Specific Industry Sectors353
1. Finance Leasing 353
2. Financial Institutions 353
3. Insurance Operations 354
4. Energy and Communication Industries354
5. Real Estate 355
6. Venture Capital Operations 355
D. Individual Income Tax 356
E. Tax Issues for Representative Offices359
F. Other Applicable Taxes 361
G. Prohibition on Unauthorized Fees Assessed against FIEs362
H. Penalties and Administrative/Judicial Review363
Chapter 10
Labor and Employment Law 379
A. Enterprise Employment 379
1. Labor Contracts 382
2. Recruitment383
3. Vocational Training 384
4. Equal Employment Opportunity384
5. Social Insurance and Welfare384
6. Protection of Minors and Female Workers386
7. Workplace Health and Safety387
8. Termination389
9. Wage and Hour Regulation392
10. Penalties for Violations of Labor Laws394
11. Dispute Resolution 395
a. Labor Mediation396
b. Labor Arbitration 396
c. Litigation397
B. Representative Office Employment399
C. Merger and Acquisitions: Employment Concerns401
1. Regulations on the Merger and Division of FIEs401
2. Provisional
Regulations on Utilizing Foreign Investment
in Restructuring State-Owned Enterprises
401
3. Provisional
Regulations on Foreign Investors Merging with
or Acquiring Domestic Companies
402
D. Employment of Foreigners in China402
Chapter 11
Financial Regulation 409
A. Banking Regulation 409
1. PRC Bank Law 411
2. Commercial Bank Law 412
a. Approval Procedures for Commercial Banks 415
b. Commercial Bank Operational Standards 416
(1) Rules for Loan Contracts417
(2) Protection for Depositors418
(3) Records, Accounting, and Reporting419
(4) Bank Employee Standards420
(5) Online Banking Regulations420
(6) Liability and Penalties422
(7) Money Laundering Prevention422
3. FIE Financial Institutions 426
a. Establishment and Registration 427
(1) Preliminary Application427
(2) Formal Application and Registration430
b. Scope of Operations for FIE Financial Institutions 432
c. Reserve Funds and Liquidity Requirements 434
d. Reporting and Audits 436
e. Management Personnel 437
f. Liquidation483
g. Supervision and Penalties 439
4. Foreign
Investment and Equity Participation
in Chinese Financial Institutions 439
B. Foreign Exchange Regulation 440
1. Application for an FERC 441
2. Opening a Foreign Exchange Account 442
3. Control over Foreign Exchange Transactions 444
4. Project Financing 447
5. Domestic Enterprises and Foreign Exchange Control 449
6. Foreign Exchange Held by Individuals 450
7. Foreign Exchange Operations of Financial Institutions 451
8. Non-Trade Forex Transactions for Multinationals 451
9. Activities Subject to Penalties 452
C. Trade Finance453
D. Group Finance,
Financial Leasing,
and Automotive Finance Companies 454
1. Enterprise Group Finance Companies 454
2. Financial Leasing Companies 455
3. Automotive Finance Companies457
E. Trusts, Trust Property, and Trust Administration 458
1. Trust Property 460
2. Parties to a Trust 461
3. Changes to and Termination of a Trust 463
4. Charitable Trusts 464
5. Trust and Investment Institutions 465
F. Accounting, Auditing, and Joint Annual Review Procedures 470
1. Accounting System for Enterprises 470
a. Accounting Reports 473
b. Financial Reports and Public Disclosure 474
2. Auditing Procedures 478
3. Joint Annual Review Procedures 480
a. Review Questionnaire 481
b. Documents Required 481
Chapter 12
Insurance Law and Regulation 489
A. Conditions for Operation 491
1. Solvency Requirements 492
2. Approval Procedures 493
a. Preparatory Establishment Stage 494
b. Business Commencement Stage 494
c. Branch Office Approval Standards 495
B. Scope of Operations 496
C. Administration of Insurance Funds 499
1. Guarantee Funds 499
2. Reserve Funds 499
3. Accumulation Fund 500
4. Public Welfare Fund 500
D. Reinsurance Requirements 500
E. Internal Control, Reports, Record Keeping, and Inspection 501
F. Insurance Contracts 502
1. Mandatory Contract Language 503
2. Exclusions 503
3. Property Insurance Contracts 504
G. Insurance Premium Rates 504
H. Insurance Agents and Brokers 505
I. Claims Procedures 506
J. Regulation of Foreign-Invested Insurance Companies 508
1. Registration and Establishment 510
2. Scope of Business, Supervision, and Administration 512
3. Termination and Liquidation 513
4. Legal Liabilities 514
K. Insurance Asset Management Companies 515
Chapter 13
Consumer Protection 519
A. Product Quality519
1. Product Quality Standards 520
2. Product Certification and Industry Standards 521
3. Product Liability 523
4. Counterfeit Products 525
5. Administrative and Judicial Remedies 526
B. Consumer Protection 527
1. Standards under the Consumer Protection Law 527
2. Administrative and Judicial Remedies 529
C. Standards for Advertisers 530
1. General Standards for Advertisers 530
2. Rules Governing Specific Industries 532
a. Pharmaceuticals and Medical Devices 532
b. Chemical Fertilizers 532
c. Tobacco Products 533
d. Food, Alcohol, and Cosmetics 533
e. Real Estate Sales and Promotions 533
3. Advertising Activities 534
4. Administrative and Judicial Remedies 535
D. Unfair Competition 535
1. Standards for Unfair Competition 536
2. Administrative and Judicial Remedies 537
E. Pricing Standards 538
1. Market-Oriented Standards under the Pricing Law 538
2. Exception for Government-Guided Prices 539
3. Pricing Prohibitions and Consumer Protection 540
F. Food Processing 541
1. Health and Safety Standards 541
a. Food Hygiene Law 541
b. Food Additives and Food Packaging 544
c. Enforcement of the Food Hygiene Law 544
2. Labeling545
a. General Labeling Requirements 545
b. Enforcement of Labeling Standards 547
c. Inspection547
d. Supervision and Administration 548
G. Pharmaceuticals549
1. Standards for Drug Manufacturers 550
2. Standards for Drug Wholesalers and Retailers 552
3. Importation of Pharmaceuticals 553
4. Packaging of Pharmaceuticals 554
5. Pricing of Pharmaceuticals 555
6. Drug Advertising 556
7. Supervision and Examination 557
H. Medical Devices and Instruments 558
Chapter 14
Intellectual Property563
A. Trademark Law564
1. General Principles of China's Trademark Law565
2. Application Procedures569
a. Trademark Application Formalities570
b. Objections to Preliminary Approval of Trademark572
c. Registration of a Trademark573
3. Application for Renewal of Registered Trademark573
4. Application for Assignment of Registered Trademark573
5. Licensing of Registered Trademarks574
6. Objections to Registered Trademark574
7. Administration of Trademarks in Foreign Trade575
8. Certification and Protection of Well-Known Trademarks575
9. Enforcement of Trademark Rights576
10. Cancellation
of a Registered Trademark and Supervision
by Trademark Office
579
11. Judicial Remedies 580
12. Criminal Penalties for Trademark Infringement581
B. Copyright Law581
1. General Principles of China's Copyright Law582
2. Standards for Copyright Infringement588
3. Restrictions
on Rights: "Fair Use" under Chinese
Copyright Law
589
4. License and Assignment of Copyright590
5. Rules for Specific Types of Works591
a. Software591
b. Book Publishers596
c. Performances596
d. Audio-Visual Recordings597
e. Broadcasts597
6. Administrative Remedies for Copyright Infringement597
7. Judicial Remedies 599
8. SPC
Copyright Infringement Case Rules:
Internet Copyright Infringement
600
9. Criminal Penalties for Copyright Infringement601
C. Patent Law601
1. Application and Approval of Patents605
2. Novelty Requirement and Exceptions608
3. License/Assignment of Patent Rights609
4. Compulsory Licensing610
5. Duration of Patent Rights 610
6. Cancellation/Invalidation Proceedings611
7. Enforcement of Patent Rights611
8. Administrative/Judicial Remedies613
9. Criminal Penalties for Patent Infringement615
D. Customs Protection of Intellectual Property Rights615
Chapter 15
Customs and Trade Regulation619
A. Customs Regulatory System 620
B. Import/Export Procedures 621
1. Inward- and Outward-Bound Means of Transport621
2. Inward- and Outward-Bound Goods622
a. Declaration and Examination622
b. Valuation of
Goods, Assessment, and Payment
of Duties
623
c. Tariff Classification 633
d. Tariff Levels, Reductions, and Exemptions634
(1) Tariff Levels634
(2) Reductions and Exemptions634
e. Rules of Origin637
f. Excluded and Restricted Merchandise638
g. FIE Import Control Standards639
3. Customs
Rules on Processing Trade,
Bonded Warehouses, and Factories
641
a. Processing Trade641
b. Bonded Warehouses, Factories, and Zones642
4. Passengers and Personal Use Articles644
C. Enforcement of Customs Laws644
1. Customs Audits and Inspections652
2. Administrative and Judicial Remedies653
D. Customs Protection of Intellectual Property Rights655
E. Trade Remedies:
Anti-Dumping,
Anti-Subsidy, and Safeguard Regulations
657
1. Anti-Dumping 657
2. Anti-Subsidy Regulations663
3. Trade Safeguard Measures 665
Securities Regulations673
A. Securities Regulatory System674
B. Company Law677
1. Establishment of a Company Limited by Shares677
2. Recordkeeping/Articles of Association681
3. Shareholders' Meetings682
4. Board of Directors 683
5. Supervisory Committee685
C. Securities Regulations 686
1. Domestic Share Regulations: A-Shares687
a. Application Procedures for Public Offering689
b. Consignment Sales/Underwriters691
c. Stock Listing692
d. Disclosure Requirements693
e. Limitations on Share Ownership/Transfer695
f. Corporate Governance Standards697
g. Penalties and Investigations698
2. Overseas Listing of Domestic Shares701
3. Foreign Capital Shares Listed in China Regulations: B-Shares704
4. Foreign-Invested Enterprise Limited by Shares708
5. Regulation of Brokerage and Trading Firms711
6. Own-Account Securities Trading714
D. Foreign Investment in State Shares and A-Shares716
1. Foreign Investment in State Shares717
2. Investment
in A-Shares by Qualified
Foreign Institutional Investors (QFII)
719
E. FIE Securities
Companies, FIE Fund Management Companies,
and Securities Investment Funds
722
F. Arbitration and Litigation of Securities-Related Disputes725
G. Securities-Related Criminal Liability726
Chapter 17
Land Use, Real Estate Development, and Natural Resources733
A. Land-Use Rights733
1. General Land-Use Principles733
2. Utilization and Protection of Land734
a. Utilization of Land734
b. Transfers of Land-Use Rights737
(1) Registration of Real Estate Transfers738
(2) Mortgage of Property740
3. Eminent Domain 744
B. Real Estate Development and Real Estate Transactions745
1. Commercial Land Development FIE746
2. Real Estate Brokers, Property Managers, and Consultants747
C. Petroleum and Mineral Resources748
D. Preservation of Cultural Resources749
Chapter 18
Environmental Protection753
A. Environmental Protection Law758
1. Environmental Protection Responsibility System759
2. Control of Chemicals/Radioactive Materials759
3. Control of Construction-Related Pollution760
4. Control of Agricultural-Related Pollution760
5. Inspection, Remedial Action, and Penalties761
6. Judicial Remedies 762
B. Control of Solid Waste Pollution 762
1. Product Packaging and Recycling763
2. Storage and Transportation of Solid Waste763
3. Control of Solid Waste in Construction Projects766
4. Control of Industrial Solid Waste766
5. Inspection, Remedial Action, and Penalties767
6. Judicial Remedies 767
C. Control of Marine Pollution 768
1. Control of Land-Originating Pollutants768
2. Control of Pollution by Vessels769
3. Control of Pollution by Offshore Oil Operations770
D. Control of Air Pollution 771
1. Control of Construction-Related Air Pollution772
2. Control of Air Pollution from Coal Burning772
3. Control of Industry-Related Air Pollution772
4. Control of Vehicle Emissions773
5. Reporting Requirements, Inspection, and Penalties773
E. Standards for the Importation of Pollutants774
F. Energy Conservation 774
G. Control of Toxics in the Workplace776
H. Environmental Impact Assessment Reporting Requirements777
I. Clean Production Law 780
Chapter 19
Mergers, Acquisitions, and Divisions787
A. Acquisition of Domestic Enterprises by Foreign Investors788
B. Merger and Division of Foreign-Invested Enterprises796
C. Public Company Takeover Procedures804
D. Anti-Monopoly and Competition Law Issues in China M&A807
1. Prohibition on Monopolistic Agreements808
2. Prohibition against Abuse of a Dominant Market Position809
3. Regulation of Enterprise Concentration810
4. Investigations and Private Rights of Action811
Chapter 20
Enterprise Liquidation, Reorganization, and Bankruptcy815
A. Liquidation815
1. Ordinary Liquidation Proceedings816
a. Notice of Liquidation: Government Authorities817
b. Notice of Liquidation: Creditors818
c. Creditors' Claims818
d. Payment of Debts818
2. Special Liquidation Proceedings820
3. Alternatives to Liquidation821
B. Bankruptcy Protection and Creditors' Remedies822
1. Application for Bankruptcy823
2. Notice of Bankruptcy Proceeding and Creditors' Meeting824
3. Secured Claims 826
4. Reorganization and Conciliation826
5. Declaration of Bankruptcy and Liquidation827
Chapter 21
Mediation and Arbitration833
A. Informal Dispute Resolution: Consultation and Mediation833
1. Mediation in China 834
2. Mediation During Arbitration835
3. Mediation During Litigation837
4. Joint Mediation 837
B. China's Arbitration System 838
1. Scope of Arbitration and Jurisdiction838
a. Nature of Claims: International Dimension841
b. Pendant Claims842
2. Arbitration Agreements842
a. Validity of an Arbitration Clause844
b. Choice of Law846
c. Choice of Forum846
3. CIETAC Procedures 847
a. Arbitration Application847
b. Appointment of Foreign Counsel in Arbitration849
c. Arbitrator Appointment850
d. Case Hearings852
e. Discovery, Investigation, and Presentation of Evidence853
f. Expert Witnesses and Appraisers854
g. Awards855
h. Consent Awards858
i. Summary Proceedings858
j. CIETAC Financial Dispute Arbitration Rules859
4. Pre-Arbitration
and Interim Protection
of Property and Evidence
861
a. Preservation of Property861
(1) Pre-Arbitration Application861
(2) Pending Arbitration Application862
b. Preservation of Evidence863
5. Cancellation of Arbitration Awards863
6. Award Enforcement Standards and Procedures864
a. New York Convention Awards864
b. Article 260: Foreign-Related Awards864
c. Article 217: Domestic Awards866
d. Enforcement Procedures867
e. Obstacles to Enforcement869
7. Drafting an Arbitration Clause in China870
Chapter 22
Litigation in the People's Court877
A. Court Structure: Supreme People's Court877
1. Procedural Issues in the People's Court880
a. Jurisdictional Issues880
b. Participants in Civil Proceedings884
c. Service of Process885
d. Limitations of Actions886
e. Pleading Rules886
f. Discovery and Evidentiary Rules887
(1) Cross-Examination892
(2) Examination and Identification of Evidence892
g. Trial Procedure and Supervision895
B. Enforcement of Judgments898
C. Administrative Litigation 899
Chapter 23
Criminal Liability for FIE Activities903
A. Director and Officer Liability904
1. Crimes Involving FIE Registration904
2. Criminal Liability for Industrial Accidents904
3. Crimes Involving Stock Transactions905
a. Insider Trading905
b. Market Manipulation906
c. Issuance of Shares without Approval907
d. False Information in Stock Transactions907
4. Miscellaneous Economic Crimes907
a. Crimes Involving
Corporate Decisions in
Violation of the Law
907
b. Crimes Involving
Falsification of Corporate
Records and Documents
907
c. Collusion908
d. Interested Party Transactions909
B. Crimes Involving Intellectual Property Infringement910
1. Criminal Trademark Infringement910
2. Criminal Patent Infringement910
3. Criminal Copyright Infringement910
4. Unlawful Disclosure of Trade Secrets911
C. Criminal Liability for Environmental Crimes912
D. Corruption and Bribery 913
1. China's Rules on Corruption and Gift Giving913
a. General913
b. Bribery915
c. Gifts to State Functionaries917
d. Commercial Bribery918
2. U.S. Foreign Corrupt Practices Act920
a. FCPA Prohibitions 923
b. Prohibition on Direct Payments923
c. Prohibition on Payments by Intermediaries924
d. Scope of Application924
e. Element of Corrupt Intent925
f. Covered Activities 926
g. Recipients926
h. Exception for Routine Governmental Action926
i. Affirmative Defenses927
j. Penalties for Violations928
k. Exposure to Private Litigation929
l. Government Guidance930
m. Compliance with the FCPA930
Chapter 24
Special Zones of the PRC933
A. SEZs, Open Cities, and Coastal Areas934
1. SEZ Regulations 935
2. Coastal Zone Regulations 936
3. Regulations
Concerning the Encouragement
of Foreign Investment
937
4. Regulations
Promulgated by Particular Zones,
Cities, and Provinces
938
a. Shenzhen939
b. Shanghai942
B. Hong Kong Special Administrative Region (HKSAR)946
1. Joint Declaration 947
2. Basic Law of the HKSAR948
a. Political Rights of Hong Kong Residents949
b. Economic Rights of Hong Kong Residents950
c. Political Structure of the HKSAR951
d. Judicial System of the HKSAR953
3. China Market Access under CEPA956
a. Management Consulting959
b. Distribution Services959
c. Retail Trade Services and Distribution960
d. Franchising961
e. Logistics and Freight Forwarding Agency Services962
f. Storage and Warehousing Services962
g. Road Transport Services962
h. Films, Audiovisual Products, and Cinema Construction963
i. Banking963
j. Securities964
k. Insurance964
l. Telecom Services 965
967
Appendix A: Sample Contracts 967
Manufacturing Agreement967
Distribution and Marketing Agreement976
Security Agreement 986
Contract for the Employment of Chinese Employees1004
Appendix (1) to the Contract for the Employment of Chinese Employees Regarding Employment Service Fees1010
Appendix (2) to the Contract for the Employment of Chinese Employees Regarding Medical Expenses 1012
Appendix (3) to the Contract for the Employment of Chinese Employees Regarding the Employment Service Fee Paid 1016
Technology License Agreement1018
Equity Transfer Agreement1074
Sample Arbitration Clause1084
Appendix B: Bibliography and Electronic Research Guide1087
Appendix C: Contact Information 1113
Index 1127
Copyright © 2008 James M. Zimmerman. All
Rights Reserved. Legal Notices
