Baidu Wins New York Seach Results Lawsuit, and I’m Perplexed

March 28, 2014

This case goes back a few years. Some activist types in New York filed a federal suit against Baidu because their propaganda political speech did not pop up in search results. Claimants said that Baidu had violated their right to free speech.

At the time, I responded with a rant, “Baidu vs. NYC Dissidents: Why This Case Sucks.” The title speaks for itself, but basically my opinion was that this case would be dropped like a hot brick by the judge (easy call), and indeed it has been. I followed this up with “Baidu vs. NYC Dissidents: A Cranky Postscript,” after I read the decision, at which time I added “My goodness, that’s utter shit.”

The case was kicked on procedural grounds almost exactly one year ago, and I thought at that time it was all over. I was wrong, and somehow the plaintiffs were able to overcome the service of process defects — hey, I’m no litigator.

So it went back to federal court . . . and the judge dropped it on substantive grounds this time. But in doing so, the judge apparently justified his actions on the grounds of Baidu’s right to free speech in curating search results.

I’m mighty confused.

Continue reading

The Latest AmCham China Biz Survey: Perception and Reality

March 20, 2014

It’s always difficult for me to find something interesting to say about the American Chamber of Commerce’s annual China business survey. The content itself is often of marginal value, with only a couple significant trends hiding away down in the data to be ignored by the mainstream press. Speaking of which, the domestic newsies like to tout optimism stories, while the foreign press enjoys highlighting pessimism, higher costs, IP infringement, and so on. This year is no different in that regard, although there are a couple of items worth mentioning.

Continue reading

China Dragged Away from XP Kicking and Screaming

March 10, 2014

The Chinese are none too pleased that Microsoft will be retiring XP next month, and the bitching and moaning has been fairly loud. But while it is true that in a sense, Microsoft will be leaving a large percentage of its PRC user base in the lurch, I would argue that the complaints have been hyperbolic and unfair.

Continue reading

Kunming and the Terrorism Scare Quotes Debate

March 4, 2014

Chinese internet users on Monday accused the United States of double standards after Washington condemned a deadly knife attack in southwest China but refrained from calling it a terrorist incident. (SCMP)

The China Hearsay verdict is . . . guilty! Lots of double-standarding going on with this one, but it says a lot more about America’s ridiculous War on Terror than anything else.

Continue reading

Talk of a China Tobin Tax Is Good News, Isn’t It?

January 6, 2014

Lots of chatter on the Interwebs about the possibility of a cross-border capital transaction tax in China (aka Tobin Tax – you remember this from first-year Macroecon) after some verbal musings on the topic from Yi Gang, head of the State Administration of Foreign Exchange and vice-gov of the PBOC. The Telegraph, bemoaning the effect of a Tobin Tax on London’s plan to be a RMB trading center, called the idea a potential “cold douche.” Ick.

I have a different take on this. I figure that if Beijing is thinking seriously about a Tobin Tax (the idea has been tossed about by other folks here as well), that means they are worried about unrestricted capital flows.

Why would anyone worry about unregulated capital flows? Maybe senility is catching up with me, but it seems that this wouldn’t be an issue unless Beijing was planning on continuing with deregulation in this area and perhaps even accelerating the trend. And that sort of news would be quite welcome, yes?

Anyone want to back me up on this one?

By the way, this Tobin Tax discussion is yet another bit of evidence firming up my long-held belief that the Asian Financial Crisis of the late 90s was the most significant economic episode of the past 30 years. Without the AFC, we not only wouldn’t be even talking about transaction taxes, but arguably the RMB would have been made freely convertible many years ago.

Why Huawei Should Hire Edward Snowden

January 2, 2014

Happy New Year, everyone. Moving into 2014, I think we have a much better idea about what is going on in the world of IT security and government skullduggery than we did this time last year, thanks to ex-contractor Edward Snowden, grudging investigative reporting and even more reluctant U.S. government oversight.

These disclosures about what the U.S. National Security Agency was doing with private data puts a rather interesting spin on the longstanding battle between the U.S. government and China’s IT giant Huawei, which has been trying to break into the American market for quite a few years now. Every time it tries for a significant deal over there, Congress steps in and torpedoes it in the name of national security. We’ve even seen Congress hold special hearings and conduct investigations into Huawei’s activities and alleged connections with the Red Menace Commies Yellow Peril Maoists Beijing. Well, the worm has certainly turned.

Continue reading

China’s Innovation Fetish

December 25, 2013

Merry Christmas everyone! This is one of my favorite “holidays.” I put that in quotes because I always work on the 25th, so it is technically not a holiday for me. However, I love it when things slow down and I can catch up on all the work that has piled up over the past weeks heading into the end of the year. I’ve spent a good chunk of today, in fact, wrapping up some longstanding projects and doing some training for newby lawyers on my team. Long discussions about contract templates should be part of everyone’s Christmas tradition.

Most bloggers out there are silent at the moment, but you can always count on us folks of the Jewish persuasion to chime in with an opinion, even when most of the Western world is otherwise occupied. Case in point Mr. David Wolf, consultant to the stars and author of the Silicon Hutong Blog, who penned a post on innovation in China earlier today.

I’ve written about innovation a lot over the years, from both a policy and legal perspective. However, I’ve rarely thought about a definition or the purpose of innovation itself. David goes there, so I think I should attempt to follow.

Continue reading

TCM Advice for the Cold and Flu Season. Or Maybe a Judgmental Rant.

December 2, 2013

Now that we’re sliding into the cold and flu season, a quick post on medicine seems entirely warranted. I’ll start off with a personal anecdote. The other morning, I woke up with a headache. The heat has been on for only a few weeks, so my rapidly-aging body is still adjusting to the suddenly desiccated environment. One result is that a morning headache is fairly normal this time of year.

As are nose bleeds. Dry air and all, you understand. My problem the other day was that the headache prompted me to pop a couple aspirin, a drug that is (I forgot) a blood thinner. When I got to the office and the nose bleed began, it was quickly apparent that the flood gates had been thrown open, along with strategically placed chocks to prevent them from accidentally closing. Metaphorically speaking, of course – I didn’t actually have any foreign objects up my nose until much later in the morning.

Becoming concerned, I finally ended up at a “health clinic,” something I almost never do. Turned out to be no problem, but the doc gave me some Traditional Chinese Medicine, which I ended up tossing in the nearest trash receptacle.

Yes, it’s going to be one of those posts.

Continue reading

Burberry – China’s Latest Trademark Victim?

November 29, 2013

You might have read headlines saying that Burberry had lost its trademark rights in China. Not quite. Yes, it is embroiled in a complicated, but familiar, trademark dispute with a competitor, but it’s a bit early to close the book on this one.

The backstory here is that Burberry has been fighting with a Taiwanese competitor for nearly a decade. These guys use a similar tartan pattern on their products (you can be the judge regarding the similarity) and have not been all that successful with this IP struggle thus far:

Until this month, Polo Santa Roberta had trouble convincing officials in other venues of the merits of its argument. The maker of handbags and clothing often sporting tartan  lost a dispute with Burberry in 2010 in a Hong Kong court. The judgment concluded that Polo Santa Roberta’s designs “were not novel at the time of registration” and revoked them from the city’s designs registry. (WSJ)

Hmm. Sounds like these guys went and filed a design. Novelty is a patent issue, and has nothing to do with trademark, so I bet that they went the design route because Burberry had already filed its mark in HK. Sneaky devils.

Continue reading

The Mississippification of China. Not on My Watch.

November 27, 2013

Longtime followers of China Hearsay will not be surprised to see that the topic forcing me off the proverbial blogging sidelines is religion, the question being whether China should use the “beneficial” aspects of organized religion to promote social harmony. This of course made my head explode and drove me to the keyboard. To be honest, though, this post is also the product of some self-inflicted mental ass-kicking. I’ve tried to make myself feel guilty about the extended blogcation, but thus far, I seem to be shockingly remorseless in that regard. Perhaps this post will get me back in the action.

One quick administrative note. I’m also now back on Twitter after some long-term VPN trouble that nearly drove me to tears. I’ve bypassed all that by using Buffer, which is ostensibly just a Tweet scheduler but also allows one to post while not being in direct contact with the social media platform, which requires a reliable VPN. I’m trying to simplify my life. Note, however, that using Buffer like this means that I’m not really on Twitter, so if you reply to one of my Tweets, chances are that I will not see it, or at least not immediately.

So, the article that finally jumpstarted my intra-cranial jelly was in Reuters and was entitled “China aims to harness religious beliefs to promote harmony.” I started groaning immediately after reading the lede:

Continue reading

Wherefore Bribery and Corruption: Another GSK Post

August 28, 2013

A lot of folks are talking about the spectacle of expat investigators Peter Humphrey and Yu Yinzeng, who have been caught up in the GSK bribery scandal:

On Tuesday, the couple appeared on China’s central broadcaster CNTV handcuffed and wearing orange prison vests, their faces blurred, admitting to “buying and selling” information in the course of various fraud investigations.

“The information that we had on individuals was sometimes obtained by illegal means,” said Humphrey, holding his handcuffed wrists before the camera. “I’m extremely repentant for this, and want to apologise to the Chinese government.” (Guardian)

Yikes. There but for the grace of God go I. Sort of.

I’m not going to spend time talking about Humphrey’s case, partially because it scares the crap out of me. I would like to point out, however, that I’ve dealt with several “investigation” companies over the years on behalf of clients. Every one of them who claimed that they could do things like perform background checks on individuals (including stuff like police records) were doing so illegally. To be blunt, private companies, and definitely foreign ones, simply can’t offer those services in China. ‘Nuff said.

On to GSK. The fireworks are over for the moment. Some folks are in jail pending adjudication, fines will be levied, and other pharma companies are scrambling around doing internal investigations, hoping that they get their shit together before they hear the knock on the door.

Continue reading

JPMorgan Chase Accused of Influence Peddling in China {eye roll}

August 20, 2013

I’m sorry, but this is the big China scandal of the week, an accusation that a big investment bank hired family members of the rich and powerful? Seriously, is this some sort of journalistic practical joke from The Onion?

I report, you decide (if this is silly):

[T]he Securities and Exchange Commission (SEC) is looking at whether the bank’s Hong Kong office hired the children of powerful heads of state-owned companies in China with the express purpose of winning underwriting business and other contracts, a person familiar with the matter said. (Reuters)

Sorry for stating the obvious, but is there any investment bank out there (not to mention ginormous multinational) who doesn’t engage in such practices? Seriously, these companies literally ooze with the kids of the rich and powerful.

Continue reading

GSK: Should Have Seen It Coming?

August 6, 2013

Until now I haven’t written anything on the corruption scandal rocking pharma giant GlaxoSmithKline, partially due to other commitments but also because I didn’t really see an interesting angle. Let’s face it, this is not the first corruption story to hit the China foreign investment community, and it will not be the last. Neither is this exactly breaking news for China’s healthcare sector, which is swimming in this sort of thing.

Continue reading

WTO Chokes China’s Chicken (Import Duties)

August 4, 2013

The post title, lame as it is, represents the sum total of all levity I can bring to this topic. This issue is about as dry and tasteless as . . . well, you can see where I’m going with this.

Let’s get the facts out here as quickly as possible, then I just have a couple general comments. The panel ruling in this case seems fairly cut and dried, and the US Trade Representative’s office came out with a useful press release that is straightforward, relatively free of spin, and quotable.

Continue reading

China Blog Funk-O-Rama

August 1, 2013

A strange funk seems to have descended on the English-language China Blogosphere, or at least those blogs that I usually follow (i.e., the ones focusing more on news, business, politics, economics and law). Maybe it’s something to do with the air quality here in Beijing, which is no doubt simultaneously making us lethargic, asthmatic, and less likely to blog — it’s quite possibly making us sterile as well, although I haven’t verified that one personally.

Some time ago, the stalwart Sinica podcast devoted an episode to “Death of the China Blog,” and I think things are even worse now. Speaking for myself, I had two two-week business trips, a very busy end of the 2nd quarter, and the complete failure of my laptop as impediments to regular blogging. No excuses, just an explanation.

Continue reading

Whacking the Windmill: Sinovel Indicted, Next Stop U.S. Federal Court

July 1, 2013

If you’re an environmentalist and into renewable energy, you might want to sit out this discussion about IP theft allegedly perpetrated by China’s wind turbine behemoth Sinovel. This story hits on some familiar themes, including misappropriation of U.S. IP by a Chinese company, tough competition in the clean energy sector, and even our old friend cybersecurity. Well, the last topic is a bit of a stretch; there was no hacking going on here, just some old fashioned unauthorized downloading of software.

Continue reading

Why Are Lawyers in Asia So Cheap?

June 25, 2013

To be clear, it’s not so much the lawyers who are cheap, just legal fees, at least compared to the U.S. and EU. This is the topic of “Asia’s Low Legal Stakes,” a recent article in The Asian Lawyer. Now wait, I know what you’re thinking. During this busy time of the year (for me), I’m barely managing to bang out a post once a fortnight, and this is what I consider to be important news?

Perhaps not news, but I did find it thought-provoking. Although I have problems with some of the generalizations in the article, the discussion does tell us a lot about business in Asia and how different cross-border deals are over here.

Continue reading

It’s 2013, and We’re Talking About Someone Defecting to the Reds

June 14, 2013

The most recent blah blah blah about NSA whistleblower Eddie Snowden, now running about somewhere in Hong Kong (I’m guessing Lamma Island, with all the other hippies), is that he may defect to the PRC with all his ill-gotten intelligence booty. To which I question: with the Cold War decades behind us, what does it mean to “defect” anyway?

Continue reading

Protesting Too Much

June 9, 2013

China will continue to create fair, justified and open conditions for foreign businesses, Vice Premier Zhang Gaoli said in Chengdu on Thursday.

Zhang made the remarks while meeting with attendees of the 2013 Fortune Global Forum, which opened on Thursday in Chengdu, capital of southwest China’s Sichuan province. (Xinhua)

You see one of these stories every month, with a Chinese leader making the same “Don’t worry, we like you” speeches to foreign investors. Seems to me that if you think this sort of PR is necessary, it means that there is an underlying problem that might need to be addressed.

Unless of course you believe that there is a vast conspiracy in the international community to bad-mouth the foreign investment environment in China through the spreading of vicious lies, in which case, never mind.

Smithfield-Shuanghui Deal: CFIUS, Food Quality, and More

June 2, 2013

I missed quite a few good China stories during my trip to India, but this proposed takeover of Smithfield Foods by Chinese meat powerhouse Shuanghui (also trades under the oleaginous name Shineway) is probably the most important one in the cross-border biz world. This deal will be valued at $4.7 billion, making it #1 in terms of Chinese overseas direct investment in the U.S.

Continue reading