6/12/09  Source: Legalbusinessonline.com

For two decades, Fujian has flourished on investment coming from Taiwan. And for the first time in history, the wealthy southern province will play host to branch offices of Taiwan law firms.

In the mainland’s latest move to promote cross-Strait investment and cooperation, new measures has been announced to allow Taiwan law firms to establish branch offices in Fuzhou and Xiamen, two major cities in Fujian province. Leading Taiwan firms are enthusiastic about this new opportunity to expand their reach to the vast mainland market.

“The cross-Strait economic ties have been strengthened significantly in the past 12 months, and law firms on both sides of the Strait are set to benefit,” said CT Chang, a partner of leading Taiwan firm Lee and Li. “This new development marks the beginning of a new era for the Taiwan legal market.”

The prospects of mainland investment into Taiwan are widely regarded as a growth centre for Taiwan firms in the coming years. “We expect an important part of our revenue growth in the next a few years to be driven by mainland companies investing in Taiwan,” said Chang.

In addition, the traditional restrictions on Taiwan companies investing in the mainland have been gradually lifted over the past few months, and will be overhauled once the cross-Strait “Comprehensive Economic Cooperation Agreement” is signed. Taiwan firms, which have worked with many clients investing in the mainland for the past few decades, will be sought-out by these clients to advise on a growing number of new investment, joint venture and other business ventures.

According to Chang, Lee and Li’s partners are very interested in the possibility of having a branch office in the mainland, but the decision on whether to take the plunge still depends on details yet to be issued, such as regulatory requirements and the scope of business of the branch office allowed in the mainland.

Although Taiwan law firms were banned from opening branch offices in the mainland in the past, a number of Taiwan firms have already tapped into the mainland market, mostly by setting up alliance consultancy firms that provide business consulting services. Lee and Li, for example, have alliance consulting businesses in Shanghai and Beijing. Pamir Law Group and Lee, Tsai & Partners are two other Taiwan firms with a similar business model in the mainland.

“If the mainland branch offices of Taiwan law firms are allowed to advise on Taiwan law and provide legal services, the new initiative will be very attractive to Taiwan firms,” said Chang.

While some uncertainty over the future of Taiwan firms operating in Fujian reminds, the amount of Taiwan-related legal work in Fujian, currently handled by Fujian firms, is surely increasing. The latest statistics by the Bureau of Justice of Fujian province revealed that in the first five months of 2009, Fujian firms have advised on over 800 litigation cases, around 330 arbitration proceedings, and more than 610 non-contentious matters, all of which involved Taiwan elements.

06/10/2009 Source: People’s Daily

Survey reveals that over 80 percent of netizens believe the pre-installation of filtering software on PCs violates privacy

Survey

Do you think it violates the privacy of users?

Yes: 10,504 votes or 83.95 percent; No: 1,465 votes or 11.71 percent; Do not care: 544 votes or 4.34 percent

Do you think this software can be effective?

Yes: 1,445 votes or 11.55 percent; No: 9,312 votes or 74.42 percent; Hard to say: 1,756 votes or 14.03 percent

Are you willing to pay to use it after one year?

Yes: 310 votes or 2.48 percent; No: 11,754 votes or 93.93 percent; Cannot decide before using it: 449 votes or 3.59 percent

The data comes from a survey by Sohu.com

Expert: “Uniform installation of software should go through public hearings first”

The announcement by China’s Ministry of Industry and Information Technology has led to heated discussions online. One netizen noted that, “Personal computers should also have the right of privacy.”

Ma Guangyuan, a doctor at the government policy department of the Chinese Academy of Social Sciences, said “It is my freedom to decide whether to lock my home or not.” The implementation of a uniform requirement should have legal ground.

Lv Jingjian, a member of the China Computer Federation, also noted that to popularize a type of PC software across society should go through public hearings first.

Ma said that PCs should be considered private and that although the software provider stresses that users can uninstall the software by themselves, this should not serve as the basis for requiring that the software be installed on all PCs. He further added, “There is nothing wrong with parents’ worrying that children may browse pornographic websites, but I can install necessary software all by myself. It is unnecessary to have some kind of software pre-installed on PCs uniformly, as stipulated by the state.” If adults use PCs on their own (with the filtering software preinstalled uniformly), it is likely that they feel as if they are being monitored all the time.

As to the big sum of money spent on this government purchase, which is as high as 41.7 million yuan, Ma thought that if most individual users uninstall the software upon purchase of a computer, “it will amount to a huge waste of public finances.”

Net filtering software provider: It is just a commercial behavior and has nothing to do with the government

“This is completely a commercial activity and has nothing to do with the government,” said Zhang Chenmin, General Manager of Jinhui Computer System Engineering Company based in Zhengzhou, when interviewed by reporters.

He elaborated that the “Green Dam-Youth Escort” Net filtering software was developed by his company to protect minors from indecent content on the Internet. “This software initially does not run automatically on computers upon purchase. It is just a software application package and users can choose to install or uninstall it.”

Zhang emphasized that, “This software shares the same principle as many of the software applications in the US that protect young people’s Net-surfing activities. It is designed to filter pornographic and violent information on the Internet and create a healthy Internet environment for young people. Many foreign websites and online games developed by foreign companies are awash with pornographic and violent content, wielding harmful influence on the physical and psychological development of young people. Western media politicize this kind of simple commercial behavior and even claim we have military background, which is by no means true.”

06/10/2009 Source: www.chinaview.cn

China is loosening its grip on the use of foreign exchange to encourage domestic firms to make overseas investment, as the country sought to diversify the use of its huge forex reserves.

The State Administration of Foreign Exchange (SAFE), the country’s forex regulator, said Tuesday in an online notice that it would allow all kinds of firms in China to invest their forex earnings in overseas branches.

Previously, only large domestic or foreign multinationals are allowed to do so. The other firms are required to submit their forex earnings to the government in exchange for the local currency, contributing to the huge pool of the country’s forex reserves.

The SAFE said in the same notice that it would allow firms to use self-owned forex and forex purchased with the yuan, expanding the source of forex that firms could use to invest in their overseas subsidiaries.

The administration sets a quota on such forex uses, which is no more than 30 percent of the firm’s equity.

Firms still need approvals from the SAFE to use forex in overseas investment, but the administration said it would simplify approval and forex remittance procedures to facilitate such practices.

The SAFE said the relaxed control was aimed to solve the financing difficulties of Chinese firms when they expand overseas, and such support for overseas expansion was meant to boost exports.

China’s forex reserves stood at 1.9537 trillion U.S. dollars by the end of March, the largest in the world. To play it safe, China’s huge reserves have usually been invested in low-risk but low-yield assets, such as U.S. government bonds.

06/04/2009 Source: www.chinaview.cn

China’s top anti-graft official Friday said Party and government departments should reform their systems to uproot corruption.

He Guoqiang, secretary of the Communist Party of China (CPC) Central Commission for Discipline Inspection (CCDI), listed five main sectors that reported serious corruption problems: construction contracts, real estate development, land and mining management, financial business and law enforcement.

He told a meeting of discipline departments to push the government to reform management of these five sectors and improve supervision on them, instead of simply tightening penalties on corrupt individuals.

The discipline departments should also help the Party and government to reform the promotion system, procedures of administrative approval, the management of finances, taxation, investment and government procurement, as well as the restructuring of state-owned enterprises, he said.

Through these reforms, the country would be able to prevent more corruption, he said.

New measures to prevent corruption should solicit opinion from the public and experts, He said, adding that effective ideas could be written into regulations or laws.

Some government and Party departments have tried to improve transparency of their work and supervision from the public.

The Ministry of Environmental Protection opened a public hotline on Thursday. People can directly inform the ministry of complaints about pollution and appeal to it if local environment authorities fail to solve problems.

In February, the Organization Department of the Communist Party of China (CPC) Central Committee also opened a website to receive complaints of local official malpractice in promotion.

05/31/2009 Source: www.chinaview.cn

China will raise gasoline and diesel benchmark retail prices by 400 yuan (58.6 U.S. dollars) per tonne as of Monday, the National Development and Reform Commission(NDRC) announced Sunday.

The benchmark retail price for gasoline would increase by 7 percent and the price of diesel by 8 percent, said a statement on the NDRC website.

It is the third oil price adjustment this year. On March 25, the NDRC, the country’s top economic planner, lifted benchmark retail price of gasoline by 290 yuan per tonne and diesel by 180 yuan per tonne.

The increase was in response to the rising international crude prices under the country’s the new fuel pricing mechanism, which took effect Jan. 1, according to the NDRC.

According to the new mechanism, China’s domestic prices are to be “indirectly linked” to global crude prices “in a controlled manner.” China would adjust domestic fuel prices when global crude prices reported a daily fluctuation band of more than 4 percent for 22 working days in a row

NDRC pricing department official Xu Kuning has explained the “indirect link” as “based upon average global crude prices, while taking into account domestic production costs, taxation, and ‘appropriate profits’ of oil producers.”

Crude prices have jumped 30 percent in May, the largest monthly rise since March 1999, boosted by expectations of a global economic recovery later this year.

Light, sweet crude for July delivery rose 1.23 dollars, or 1.9 percent, to settle at 66.31 dollars a barrel Friday on the New York Mercantile Exchange.

In Sunday’s notice, the NDRC urged the two state-owned oil producers, PetroChina and Sinopec, to increase oil production to meet demand.

It also urged local pricing regulators to strengthen supervision over oil prices and crack down on any price violations.

05/31/2009   Source: China Daily

Chinese authorities Sunday pledged to use the new Food Safety Law as a platform to intensify monitoring and law enforcement, hoping to curb repeated food scandals battering the industry’s reputation and consumer confidence.

The law, approved by China’s legislature three months ago, will go effective on Monday to replace the current Food Hygiene Law.

It aims to improve the efficiency of the food safety monitoring network through tougher standards, strict supervision, a recall system for substandard products and severe punishment of offenders.

State departments of health, agriculture, quality supervision, industry and commerce administration, which shoulder different responsibilities, have made plans for the implementation of the law, Xinhua learned on Sunday.

The Ministry of Health, the leading authority to coordinate the law implementation, has drafted at least three supplementary government rules to regulate the making of food safety standards, the management of new products, and the control of food safety risks.

Two national panels of experts will be set up to oversee safety standards and safety risk control. A national risk control center will also be established to enhance the level of safety evaluation, detection of toxic ingredients, and risk precaution, said Health Minister Chen Zhu.

“We hope to complete a national surveillance network of food safety in two years, on the basis of disease control and medical service networks,” he said.

Some old rules that are contradictory to the new law will be abolished or revised, he said.

Even before the new law was passed, the ministry has carried out nationwide campaigns to crack down on illegal use of uncertified additives into food products since December last year, he said.

Ministry of Agriculture, which is responsible for monitoring the safety of farm products, has been formulating regulations concerning the proper use of feed, feed additives and pesticide, and the quarantine of animals, said deputy minister Chen Xiaohua.

State Administration for Industry and Commerce vowed to enhance the supervision of food circulation market, particularly food retailers who are asked to ensure the safety of sold food.

Bian Zhenjia, deputy head of the State Food and Drug Administration, said the department would increase the awareness of catering industry to guarantee food safety through various steps, including a new certification system for restaurants to become effective on Monday.

Although China had certain food quality control systems in place for many years, lots of loopholes emerged in past years, mainly due to varied standards, lack of sense of social responsibility among some business people, too lenient punishment on violators and weakness in testing and monitoring work.

China has a food hygiene law, which took effect in 1995, to regulate issues of food safety. But it was outdated and the food monitoring system has long been blamed for lacking efficiency, which led to repeated scandals ranging from tainted dairy products to vegetables with excessive pesticide.

The adoption of the new food safety law was widely hailed as a landmark move to grapple the problems.

5/29/09 Source: China Daily

China should reform its social security system in a bid to boost domestic demand and transform the growth mode that relies too much on exports, economists said in Beijing Tuesday.

Vivek Arora, IMF’s chief representative in China, told a financial forum that China will have to rely more on domestic consumption if it seeks to repeat its economic miracle over the past 30 years.

Exports, the pillar of China’s growth, collapsed late last year as the major markets, including the United States, Japan and the European Union, entered recession.

China’s economy therefore suffered sharp slowdown. The gross domestic product (GDP) expanded 9 percent year on year in 2008 and 6.1 percent in the first quarter of 2009, compared with 13 percent in 2007.

Economists warned that it is not easy to revive Chinese economy by boosting domestic demand as many citizens are unwilling to spend because of the lack of sufficient social security.

“China should carry out social security reforms, such as in medical care, pension fund and education, to reduce economic uncertainty and boost higher spending,” Arora said at the two-day China Finance Summit, which ends Wednesday.

He acknowledged that China’s economic data for March and April has shown signs of recovery as its 4-trillion-yuan ($586 billion) stimulus package fed through the economy.

The infrastructure-focused government spending could ease the slowdown in the short term, but it might not be the solution in the long run, Arora stated.

Pier Carlo Padoan, deputy secretary of the OECD, told Xinhua that many countries need to change their growth models and in China, the government should improve social security for that purpose.

Padoan added that he is convinced that China will succeed in transforming the growth mode to rely more on domestic consumption.

Eric Maskin, the 2007 Nobel Prize Laureate in Economics, told reporters that he anticipated the high saving rate in China to turn into more domestic consumption.

China’s saving rate rose to 49.9 percent in 2007 from 37.5 percent around 1998, compared with 4.2 percent in the United States in February this year.

Arora added that China should encourage major banks to provide more funding to small and medium-sized enterprises (SME) to help them ride out of the crisis.

Chinese banks usually lend to big state-owned enterprises and infrastructure projects while shying away from SMEs for fear of bigger bad loan risk.

Arora said that despite the slowdown, China might continue to be the largest contributor to the world’s economic recovery because many other major economies see their GDP contracting.

The IMF official said the global economy will not repeat the Great Depression in the 1930s as the countries worldwide have taken forcible and coordinated efforts to tackle the crisis.

Maskin said the global financial crisis might come to an end by the end of the year and the financial market will return to normal again next year. However, he admitted that it will take longer for the real economy to recover.