Jenny Zhang, Attorney at Law, Lawyer, Law firm in Dalian, China

Recently, I got a case, a payment dispute in  international sales of goods.

China is an typical exporting country, foreign importers and distributors just got enough proceeds from importing Chinese goods. As most foreigners are trustworthy, Chinese exporters get used to sell goods overseas just on open account. In the good time, there is no problem. But depression finally came,  a lot of credit also become “credit”. Many Chinese exporters can’t get the payment any longer.

When the importer established  an agency in China,  it is easy to lodge a lawsuit in China. But if the defaulting party has  no office and property in China, how would we do? Solution?

Step One  Arbitration  Here I don’t want to talk about the advantages of arbitration. Since almost all the countries around the world participated in New York Convention, it’s just SO easy to enforce the arbitual award. In oral contracts, generally the parties haven’t even mentioned the possible disputes let alone resolution. There is, therefore, no arbitration clause in the contracts. If any party intends to choose arbitration, it can only resort to the agreement from the other party. However, when both parties really begin their “fight”, I guess the defaulting party just don’t care what the aggrieving party will do as it has no porperty to be enforced in China. Moreover, the attorney fee is that dear in western countries, they just gamble that Chinses party would not sue in their countries.

Yeah, they were right. Espacially in such recession, it seems that Chinese exporters are more torlerant.

BUT to those who deliberately refuse to pay money even if they have the ability to pay, we must protect us from such loss.

And the solution is TRAIL in China. (continued)

Source: China Daily

The government will not adopt a “buy Chinese” products’ policy to stimulate its economy because that would be imposing trade protectionism, Vice-Commerce Minister Jiang Zengwei said yesterday.

Domestic and foreign products will be treated on equal footing “as long as there is demand”, he told a press conference.

Some US senators’ efforts to introduce a “buy American” clause in its economic stimulus bill have alarmed the international community.

The Chinese government has already taken measures to stimulate the domestic market, Jiang said, but will not adopt a “buy Chinese” policy mirroring the “buy American” clause.
Jiang’s remarks were in response to a question whether China would experiment with a policy similar to the US clause to boost domestic demand.

“In the age of globalization, no country can expect to meet all its domestic demand with its own products,” he said.

What every country should do is to try to best meet its consumers’ demand through international trade, he said, stressing that the competitiveness of an economy lies in the quality and prices of its products.

US stimulus bill
The economic stimulus bill under consideration of the US Senate makes it mandatory for US-made iron and steel to be used in projects paid for by the bill. But President Barack Obama has expressed concern over the provision, and critics have warned that it could prompt other governments to resort to protectionism.

“I think that would be a mistake right now,” Obama told ABC News last week. “That is a potential source of trade wars that we can’t afford at a time when trade is sinking all across the globe.”

Though senators agreed to specify in the bill that international trade deals might not be violated, they rejected a proposal to remove the clause altogether.

    News from Xinhua net, the Obama administration on Monday announced it had imposed sanctions on companies in China, the Democratic People’s Republic of Korea (DPRK) and Iran for violating U.S. laws aimed at stopping the spread of missiles and other weapons technology.

    The U.S. government said it had determined that two Chinese companies, Dalian Sunny Industries(大连盛辉) and Bellamax, had engaged in activities that breached the Arms Export Control Act and the Export Administration Act of 1979, according to the Monday edition of the U.S. Federal Register.

 (http://www.access.gpo.gov/su_docs/fedreg/a090202c.html)

    The United States also claimed that the two companies had engaged in proliferation activities, which violated Executive Order 12938 of Nov. 14, 1994.

    The sanctions, which took effect on Feb. 2, bar the companies from providing goods, technology or services to U.S. government agencies and departments for two years. The sanctions also bar the import of any goods, technology or services from these companies into the United States, the Register said.

     China expressed opposition Tuesday to the United States’ decision to impose sanctions on two Chinese companies that allegedly violated U.S. anti-proliferation laws.

     ”China’s stance on anti-proliferation is clear,” Foreign Ministry spokeswoman Jiang Yu told a regular news briefing.

    She said China firmly opposed the U.S. sanctions against the Chinese companies and added that the action “was not good for healthy bilateral cooperation in the field of anti-proliferation.”

Comments:

I surfed the net and found Dalian Sunny Industries is a manufacture of titanium materials for aerospace, medical applications. Since I am not familiar with materials industry, I can’t tell the exact relationship between titanium and nuclear. But U.S government really used excessive “weapons” recently to attack Chinese products. All the harsh domestic laws would just harm international trade and make the the economy condition worse.

According to an article in Forbes.com, in the recent U.S.-China dispute about anti-piracy, the WTO’s dispute resolution panel ruled Monday that some of China’s copyright law and enforcement measures violate the WTO’s intellectual property rights regime and thus “nullify or impair benefits accruing to the United States under that Agreement,” in a decision posted on its Web site.

Washington claims that the trade body took its side in a suit against China, yet the decision will not halt intellectual property theft. The Office of the U.S. Trade Representative claimed Monday that the WTO has agreed that China’s rampant piracy problem is a breach of its treaty obligations, giving the U.S. extra muscle to press China for financial compensation. But it seems that the WTO actually demurred on a key U.S. argument, the one with the most bite: that Chinese law is not harsh enough on punishing counterfeiters. Washington has obtained “an important victory,” U.S. Trade Representative Peter Allgeier announced. However, “The United States has not established that the criminal thresholds are inconsistent with China’s obligations” under WTO, the panel said. That part is “disappointing,” Allgeier conceded in his statement.

Piracy debate or dispute is a significant issue between China and U.S. Before China’s entry into the WTO, U.S. always attacked the China’s intellectual protection in accordance with “Special 301”. But this time, the U.S. settled the trade-related dispute in the WTO Dispute Settlement System.

Even though there is a shift of U.S. government this year, it doesn’t change the viewpoint of the U.S government on intellectual protection issue.

The first stage of construction for Yangpu Free Port has passed the acceptance check on Oct 13,2008. The ten ministries acceptance inspection team includes the Customs, Development and Reform Commission, the Taxation, the Industrial and Commercial Administration, the Quality Examination and so on. Lvbin, Deputy Minister of China Customs and Luo Baoyou, Hainan’s governor Unveiled for Yangpu Free Port.

(news form Wenhui Hongkong)

Yangpu Port in Haikou, Hainan province is China’s fourth free-trade port area after Yangshan Port in Shanghai, Dongjiang Port in Tianjing and Dayaowan Port in Dalian. Yangpu Port will enjoy preferential tax rates under its new status. Yangpu Port has close trade relations with the Association of Southeast Asian Nations (ASEAN) and abundant oil resources in nearby offshore areas.

China’s first anti-monopoly law finally came into effect yesterday. It takes too long for it to come into birth(15 years) and since China is still in the change into the market economy, this law attracts a lot of attention, espcially from some foreign investors.

The new law includes eight chapters and fifty-eight articles, including General Principles, Monopoly Agreement, Abuse of Dominant Market Position, Concentration of businesses, Eliminating and Restricting Compitition by Abuse of Administritive Power, Investigation of the Suspected Monoploly Conducts, Legal libilities and Supplymentary Articles.

Someone said, “The new anti-monopoly law establishes a basic framework to build a fair, uniform and national competition law system that benefits consumers by recognising and preserving incentives to compete”. Since there exist a lot of state-owned enterprises and state monoply in China, it is high time for it to influence on such industries as petroleum, telecommunication.

For foreign investors, the decision-making process will become more easy because this law would help to reduce risks in investment. As reads in the law that “As well as anti-monopoly checks stipulated by this law, foreign mergers with, or acquisitions of, domestic companies or foreign capital investing in domestic companies’ operations in other forms should go through national security checks according to relevant laws and regulations”, when foreign investors plan to aquire major State-owned enterprises or companies with famous brands, they shall firstly go through the anti-monoply check provided here.

In Chapter Five, the law also stipulates that “government departments should not take advantage of their power to curb competition”, and prohibits governments from appointing producers or suppliers for unit or individual procurement. I like this part very much, because it expressly prohibits the local protection in government procrement. And that also means more opportunities for multinationals.

One big concern for myself is that the law does not stipulate a definite enforcement party. It only mentions an anti-monopoly committee directly under the state council but did not say who would enforce it. According to CCTV, three government bodies–the Ministry of Commerce, the National Development and Reform Commission and the State Administration for Industry and Commerce–will enforce the law. But for any case of monopoly, it must be important and complex. If there is no a professional law enforcement body, I am afraid the period of hearing and judgement would be prolonged and delayed for the reasons of shifting responsibilites or contending powers.