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June 28, 2007
Citibank and the City of Wuhan: Struggling on the Banks of the Yangtse
The smoggy, foggy and utterly disheveled metropolis of Wuhan, on the Yangtse River in Hubei Province, bears the historical distinction of locus of the river trade. [See photo I took in Wuhan that gives you an idea of the Wuhan version of a sunny day.]
Prior to the establishment of the P.R.C., the river trade consisted primarily of opium, bibles, more opium, tea, automobiles shipped up from Shanghai, coal, bibles, weapons and opium.
Aside from its typical central-China, second-tier lack of aesthetic appeal, Wuhan natives are delightfully spirited – indeed, noted within China for their revolutionary fervor – and, in my experience, fast friends. But fighters to a man.
So when, at a public forum, Citibank announced its intention to set up a bank -- based in Wuhan but spanning the central region -- in which it would hold a 20% interest, the less-than-a-mile-away thunderclap of response was heard all the way to Shanghai.
Complicating matters somewhat was the fact that, in the early years of the last century, Citibank’s predecessor built a magnificent branch, lording over the docks, as a testament to its preeminence in Wuhan business circles. That building remains. I touched it myself, inducing a frisson of electricity as it grounded my historiographically-charged body. [See photo.]
That predecessor, the National City Bank of New York, subject of at least one recent book of national significance and numerous articles, is accused of the theft of imperial and nationalist China’s asset reserves. Among other financially rapacious crimes. Alleged criminal activity, of course. [I am a lawyer, after all.] Demand was made upon Citibank to pay up for the alleged [I repeat] acts of an institution that was not only dissolved decades ago, but its assets nationalized.
Nationalized. Don’t you just love the subtle fragrance of that perfumed euphemism?
Of far greater significance is the state of Chinese banking institutions, such as the unalterably poor condition of the so-called “city banks （城市商业银行）,” rogue kin to the disastrous city cooperatives（城市合作社）and credit collectives （信用社）, mismanaged by the municipal governments that own and barely run them. [Shanghai being an exception, but only by a hare’s tail.]
Fearing the competition Citibank presents as it moves inland by virtue of the timetable specified by the WTO accords – well, intending to move inland and encountering resistance every step of the way -- Hubei provincial banking administrators have spoken out. They don’t like the idea of a new bank, preferring a reorganization of their existing decrepit and debt-ridden system. Perhaps with the aide of a white knight like Citibank, although this remains unsaid.
But Hubei banking administrators are getting scant support, it appears from their own admission, from national banking regulators in Beijing, who haven’t even responded to their reorganization proposal. And Citibank looks to be favoring an end run up to Beijing for additional leverage on the province.
Read all about it! My rough translation of this recent article from 21世纪经济报 follows.
Prelude to a Yangtse River Bank: Citibank’s Ten Billion Yuan Trick
Relevant Applications Not Received by Hubei Banking Administration
People in the Hubei Provincial Banking Administration have disclosed that the reorganization of existing city business banks would be more practical than the establishment of a new bank.
June 23, a.m, on site at the “China Creates” display at the Wuhan Science and Technology Event Center, Citibank’s rather bland display board attracts the attention of event goers.
The Citibank banner, no more than 200 characters long, displays to all their intentions toward the Central region. The bank proposes to inject 10 billion RMB (approx. US$1.25 billion) to create a national stock-issuing bank – Yangtse River Bank, 20% of which will be held by Citibank. It is well known that Hubei has for a long time wanted to create a regional business bank, but the fact that a foreign bank has thrown out a proposal has astonished the financial world. Everyone involved has kept their reactions to a low undertone. Hubei Provincial Banking Administration officials tell reporters that there is nothing to this at present. Citibank China regional public relations executives refuse to comment. Two roads present themselves: integrate the city business banks or to reorganize them entirely. Each presents difficulties.
Citibank’s Proposal
Recent reports suggest that Citibank has already begun to set up a bank in Wuhan by the name of the Yangtse River Bank (or Yangtse River Development Bank). Moreover, Citibank Group’s international executive Vice-President has said in a speech that the Yangtse River Bank will attract 10 billion RMB in capital obtained from international, Chinese and local sources, of which 2 billion RMB will come from the Citibank Group and the American Brysam Global Partners.
On the afternoon of June 25, a reporter telephoned Mao Zhi-hua, manager of public relations for the China region, to ask about the organization of the Yangtse River Bank. Mao said he would not comment at this time.
A source disclosed that no application for the organization of the Yangtse River Bank has to date been received by the Hubei Provincial Banking Administration, and that the proposal was still only an idea. A spokesman from the largest business bank in Hubei province – Wuhan Business Bank -- said he had not heard about the organization of the Yangtse River Bank.
“Currently, there is nothing to this,” came the response on the afternoon of June 25 from the Hubei Provincial Banking Administration.
That spokesman said, “I think this issue should not be raised just now, because the People’s Congress and the Politburo have proposed similar ideas about the improvement of the Hubei banking system. In the past, the relevant departments looked into it and studied improvement of the financial system. But the financial system is a complex problem.”
The spokesman said that the establishment of new financial institutions was far more difficult than coming up with the idea to do so. From Citibank’s point of view, they can naturally express their own ideas on the subject, “ But this issue isn’t just about talking. Even though foreign banks think the Wuhan financial market is ripe for development, setting up a financial institution can lead to a series of problems, and whether the idea can be put into practice is awfully hard to say.”
Reorganization of the Old or Establishment of the New?
What differs in Citibank’s idea, in the eyes of local Wuhan scholars, is that the development of the Wuhan Business Bank would have stronger roots within the local region.
“Strengthening and expanding the Wuhan Business Bank, creating a stock-issuing bank that spans the region, is, I think, the most practical,” says Wuhan University Economic Study Center’s President, Ye Yong-gang.
Ye Yong-gang’s proposal is to first inject capital into the Wuhan Business Bank with a share issue, thereafter change the bank’s name, and finally to change the business model to operate regionally as a stock-issuing bank.
Song Qing-hua, professor at Southeast Financial Economy, Law and Politics University, Xinhua Finance and Insurance Study Center, believes that a regional stock-issuing bank with its main branch at Wuhan has two possibilities: reorganization or the establishment of a new bank.
Song Qing-hua tends toward reorganization. “China already has over 130 banks, not a few, and the crucial thing is to take these banks and create a real market presence, and to increase competitiveness. Since we’re talking about bank, it must have a certain size, and only in this way, can it create trust among people and be capable of meeting its competition.”
A spokesman for the Hubei Provincial Bank Administration said that the integration of the city business banks in Hubei would be more practicable than the establishment of a new bank. “We could take the Wuhan Business Bank and [those of other cities] and merge them.”
Wuhan Business Bank would naturally form the core. Established in the late 1990s, its registered capital is 568 million RMB, and the Wuhan City Economics Bureau holds 17.6%, as its largest shareholder.
“Creating a large Wuhan Business Bank would meet with very great obstacles, coming from those municipalities with their own city business banks,” says a source.
An administrator who knows Hubei finance says that the Hubei provincial government has wanted to merge and reorganize the city business banks and credit collectives, creating a big and strong “Yangtse River Development Bank.”
“But there’s some difficulty in doing this.”
The difficulty includes the fact that within Hubei, banks and credit collectives have developed unevenly, just as was the situation encountered when Jiangsu provincial banks were reorganized into the Jiangsu Bank. A source close to the Wuhan Business Bank disclosed that, in planning future development strategy, Wuhan Business Bank wanted to take off on its own and to launch an IPO. It was not willing to merge and reorganize with other banks in the province.
The Dream of a Regional Banking Center
During the “China Creates” event, Hubei Provincial Vice-Governor Li Chun Ming did not express an opinion as to Citibank’s plan.
Sources say that Citibank has raised the idea with Hubei provincial officials in the past. As to the establishment in Wuhan of a national stock-issuing bank, Hubei province and the city of Wuhan have many times submitted their applications to national administration, but have never received any response. “At this time, they purposefully maintain a low profile on this issue, and I guess they are worried that national administrators are taking a long time in the approval process.”
Wuhan has never stopped dreaming of the day when it would once again become a financial center. The most recent proposal for a regional bank was submitted at the 5th meeting of the 9th plenum of the 2007 Hubei Political Committee, when top officials suggested that “a regional development bank can only be established in Wuhan.”
Previously, at the 2004 national meetings, the former Wuhan City Political Committee Chairman Liu Shan-bi submitted a proposal in his capacity as a national official, entitled: “A proposal to speed up the development of a regional financial center, regarding establishment in Wuhan of the Hankow Development Bank,”
Liu Shan-bi believes that, a stock-issuing bank, rooted locally, serving the central region, and aiming at national service, is established in Wuhan, it would have a far reaching effect on curtailing the loss of capital away from the area, support the growth of the central region, stimulate production..etc. etc. etc.”
21世纪经济报道 2007-06-26 16:18:30
“长江银行”前奏：花旗百亿谋略
湖北银监局尚未接到有关申请
本报记者 聂春林 刘晓 实习记者 王传晓 武汉、上海报道
湖北省银监局相关人士表示，相比成立一家新的银行，整合湖北省现有的城市商业银行更为现实。
6月23日上午，武汉科技会展中心二楼“华创会”现场。花旗银行一块并不起眼的展板引起参展者关注。
花旗银行用不到200字的篇幅向外界展示了其向中部区域渗透的用心。该行建议，牵头引资100亿元，在武汉设立一家全国性股份制银行———长江银行，花旗有意持有20％股份。
湖北方面设立区域性商业银行的意图早已为外界知悉。但此次由一家外资行先抛出一纸建议书却令金融界人士颇觉诧异。
各方对此反应均非常低调。湖北银监局某人士告诉记者，此事目前还没有说法。而花旗中国区负责公共事务的人士也拒绝表态。
摆在湖北面前的有两条路：整合现有地方城市商业银行或者重新组建。无论哪种选择都一样艰难。
花旗的设想
近日有媒体报道称，美国花旗银行拟在武汉组建长江银行(或称“长江发展银行”)，目前已经进入筹建阶段，并援引花旗银行集团全球决策管理部高级副总裁刘恒中的讲话称，长江银行将从国际、国内、民间等引进战略投资资本100亿元，其中，从花旗集团、美国Brysam全球银行投资合伙公司等国际银行财团引进20亿元。
6月25日下午，记者致电该行中国区负责公共事务的毛志华，询问组建长江银行一事，毛表示暂不表态。
一位知情人士透露，关于组建长江银行的申请目前还没有报到湖北银监局，组建“长江银行”一事还停留在设想的层面。湖北省内最大的城商行———武汉商业银行一位人士告诉记者，没有听说组建长江银行一事。
“目前还没有说法。”6月25日下午，湖北银监局办公室相关负责人如是答复本报记者。
该负责人称：“我觉得现在不要提这个问题，因为关于银行的设置问题，有人大、政协代表就如何完善湖北省的金融体系提出过类似的建议，前期相关部门也进行了考察，研究如何完善金融布局。但金融布局是一个比较复杂的问题。”
该负责人表示金融机构的设置远比设想困难。如果站在花旗的角度，自然可以对此事发表自己的看法。“但这个事情不是说说的问题，虽然外资金融机构很看好武汉的金融发展环境，但设置一个金融机构将面临一系列的问题，想法能否付诸实施很难说。”
重组还是重建？
与花旗银行的设想不同，在武汉当地学者们眼中，在武汉商业银行的基础上发展区域性银行似乎更现实些。
“把武汉市商业银行做大做强，扩展成为跨区域的股份制商业银行，在我看来更为现实一些。”武汉大学经济学院副院长叶永刚表示。
叶永刚的方案是，首先将武汉商业银行增资扩股，然后更名，最终转型成为跨区域经营的股份制银行。
中南财经政法大学新华金融保险学院教授宋清华认为，总部设在武汉的区域性股份制银行，有两种组建方式：一是重组，二是新建。
宋清华更倾向于采取重组的方式。“中国已有130多家银行，银行的数量并不少，关键是要将这些银行塑造成真正的市场主体，提高他们的竞争力。既然是银行，就必须有一定的规模，只有这样，对内才可以取信于民，对外迎接竞争。”
湖北省银监局相关人士曾表示，相比成立一家新的银行，整合湖北省现有的城市商业银行更为现实。“可以把武汉市商业银行和宜昌、荆州、襄樊、十堰、孝感、黄冈、荆门等地城市商业银行合并。”
武汉商业银行理所当然成为重组的核心。该银行成立于上世纪90年代后期，注册资本为5.68亿元，其中武汉市财政局占17.6%，是最大的股东。
“做大武汉商业银行，遇到的最大的阻力，在于其他几个地级市的商业银行，一直得不到地方财政的放行。”知情人士告诉记者。
熟悉湖北金融的一位监管人士称，湖北省政府此前也想仿照徽商银行模式，进行省内城商行和信用社联合重组，组建“长江发展银行”(拟)，实现做大做强，“但是有些困难。”
而困难就包括湖北省内各城商行和城信社的发展不平衡，跟当初江苏省组建江苏银行遇到的情况一样。据一位接近武汉商业银行的人士称，在设计未来发展战略时，武汉商业银行更愿意单飞，并有上市的想法，而不愿意参与省内城商行的联合重组。
区域金融中心之梦
湖北省副省长李春明在“华创会”记者见面会上，对花旗银行的建议不置可否。
知情人士称，花旗银行这一设想应该与湖北省有关方面事先沟通过。在武汉设立全国性股份制银行的想法，湖北省、武汉市已多次向国家有关部门提出过申请，但一直未得到回复。“此次刻意保持低调，估计是担心国家有关部门审批手续较长。”
武汉从来没有停止过恢复昔日金融中心的梦想。
最近的一次设立区域金融中心提案，是在2007年湖北省政协九届五次会议上，民革湖北省委员会建议，“成立一家中部发展银行，总部设在武汉。”
此前的2004年全国两会上，武汉市原政协主席刘善壁以全国政协委员的身份提交了一份提案：“关于在武汉组建汉口发展银行，加快推动中部地区金融中心建设的建议。”
刘善壁认为，如果能在武汉新设立一家立足地方、服务中部、辐射全国的股份制银行，对改善中部地区资金外流，扶持中部地区企业发展壮大，促进中部崛起战略的实施，将产生深远的影响。
June 22, 2007
The AFL-CIO and Chinese Unions
Today's post contains a few questions I'm hoping some of my readers might be able to answer.
This WSJ article on American labor union officials and labor activism in China is an interesting read.
The All-China Federation of Trade Unions (ACFTU) is a government department. Its management does not take its cue to any degree from laborer members, who, by the way, must, without exception, join. There are no benefits to speak of - except perhaps for the annual ticket to see a movie (forget a first run) and perhaps a box lunch.
[Here is a video interview with Andy Stern, President of the Service Employees International Union, speaking on his union's involvement with Chinese unions. Thanks to Bob Kapp for the onpass.]
It strikes me as incredible that American union officials have any sway without explicit approval and active participation of the Chinese Communist Party (CCP) at the highest levels – and certainly the encouragement of labor activism in general is not at the top of the Party's “to do” list.
So here are a few questions to my readers:
1) Can anyone point me to research on CCP control and oversight of the ACFTU? Is anyone working on AFL-CIO involvement in the Walmart “unionization?” The WSJ story does not refer to sources other than foreign union spokesmen, and I wonder if scholarship has been done on the subject.
2) This may be well out in left field, but it strikes me that there exists some American legal stricture upon union mobilization in connection with Communist controlled labor unions. Am I mixing something up? Call this a junior moment, if you will, but some legal thread somehow perhaps related to COCOM of years ago is telling me some federal prohibition exists.
Posted by Richard at 3:22 PM | Comments (0)June 21, 2007
Guangdong Court Applies Hong Kong Law in Commercial Lease Dispute
From Xinhua come reports of this case, in which a Guangdong court has, for the first time, decided a commercial leasing dispute by application of Hong Kong law. Thanks to Paul Jones, a barrister, solicitor and trademark agent in Canada, for making note of this article. You will find the original article in Chinese directly below the translation.
Our translation was graciously provided by ZHAO Chen, a patent examiner at the State Intellectual Property Office of the P.R.C. and a certificated translator. Zhao Chen, an M.E. graduate from Tsinghua University, blogs on China's intellectual property system: here (for readers in mainland China) or here. Two of his published commentaries may be read here and here.
Mainland Court Applies Hong Kong Law for the First Time
Contracting Parties are Both Hong Kong based Companies
June 13, 2007
By DENG Xinjian, WU Jiao, From Legal Daily
On June 11, Zhongshan Intermediate People's Court of Guangdong Province made the first instance judgment on a Hong Kong-related lease dispute. The case is said to be the first one where Hong Kong law is applied by a mainland court. Plaintiff Diamond Lease Ltd. (hereinafter referred to as “Diamond”) and one defendant Ronghui Technology Ltd. (hereinafter referred to as “Ronghui”) are both Hong Kong based companies. The court ordered the lease contract between the parties to be terminated, and the lessee Ronghui to return rental equipment.
The dispute is reportedly due to defendant Ronghui’s violation of the lease agreement. Plaintiff Diamond claimed that, on November 22, 2002, it entered into a lease contract with Ronghui agreeing that Ronghui leased certain machine equipment from Diamond. Diamond delivered the equipment to Ronghui for use under the agreement, although the actual user was Ronghui Electronics (Zhongshan) Ltd. (hereinafter referred to as “Ronghui II”). However, Ronghui did not fulfill the rental payment requirements set out in the contract, and failed to pay any rental ever since September 2003. Diamond alleged Ronghui’s contractual violation, and requested the court to order the contract dissolution and the return of rental equipment from two defendants.
“This contract shall be governed by, and interpreted and construed in accordance with the Law of Hong Kong. The Lessor and Lessee consent to the jurisdiction of courts in Hong Kong, and the Lessor may turn to courts in any other competent jurisdiction for compulsory enforcement of this contract.” The contracting parties agreed upon the application of law for dispute resolution under Article 16 of the Lease Contract.
Since Diamond and Ronghui concurred the law of Hong Kong as the governing law, Zhongshan Intermediate Court ordered Diamond to proof concerning the application of law. In response, Diamond filed a legal opinion rendered by Deacons Law Firm, Hong Kong, proposing opinions concerning certain provisions of the lease agreement. According to this legal opinion, Diamond may, in the case that Ronghui fails to pay rental timely pursuant to the terms and conditions of the agreement, immediately terminate the contract through written notification under the agreement, and be liable correspondingly for breach of contract.
Zhongshan Intermediate Court found that the legal opinion filed by Diamond was provided by qualified attorney in Hong Kong, attested by appointed attesting officer recognized by the Ministry of Justice, and delivered through China Legal Services (Hong Kong) Ltd. The opinion was thus not only presented via a sound, legal channel, but the legal content within Hong Kong thereof was in accordance with the judicial principles of the Basic Law of Hong Kong, and was neither contrary to basic principles of mainland law nor against social public interest. Therefore, the opinion could be adopted.
Zhongshan Intermediate Court so determined at first instance that 1) the lease contract between the plaintiff and the defendant terminate, 2) Ronghui return all the machine equipment leased from Diamond within three days after the ruling takes effect, 3) the two defendants bear the Case Acceptance Fee, RMB 36,500 Yuan.
CHEN Wei, Judge of No. 4 Civil Division of Zhongshan Intermediate Court, stated that extraterritorial application of law in hearing cases is available under two circumstances. One is where both parities in dispute have clearly agreed upon the application of law provided the agreement is valid, the other happens where the most related law with the dispute is extraterritorial law based upon the most significant relationship principle if the disputing parities fail to identify any governing law.
More Words from the Judge
Concerning the jurisdiction of this case, presiding judge CHEN Wei points out that Diamond and Ronghui have agreed upon the jurisdiction over disputes, i.e., the lessor and lessee consent to the jurisdiction of courts in Hong Kong, and the lessor may turn to courts in any other competent jurisdiction for compulsory enforcement of the contract. This means the lessor can make the contract enforceable in other dispute-related jurisdiction besides the jurisdiction of Hong Kong’s courts. Thus, the jurisdiction of courts in Hong Kong over their dispute set out in the contract is actually a non-exclusive jurisdiction, or in other words, does not preclude the jurisdiction from competent courts of other countries.
This is further clarified in the purchase agreement, an annex to the lease contract, signed by the contracting parties on the same day. The agreed upon jurisdiction set out in the agreement is that both parties consent to the “non-exclusive jurisdiction” of courts in Hong Kong concerning any litigation and legal proceedings of certain agreement. Hence, Diamond has the right to litigate this case before other courts with competent jurisdiction besides courts in Hong Kong. Through financing lease, Ronghui leased machine equipment (commodities) from Diamond in compliance with its purchase requirement for the purpose of Ronghui II’s use. As a result, the place of performance of this contract is mainland China where Ronghui II is located; meanwhile, machine equipment, object in dispute of this case, is also located in mainland China. The litigation brought by Diamond before Zhongshan Intermediate Court, therefore, is in accordance with Article 24 concerning territorial jurisdiction and Article 243 of the Civil Procedure Law of P.R.C, and Zhongshan Intermediate Court has jurisdiction over this case.
合同双方为香港企业 内地法院首用香港法律判案
2007年06月13日 08:26:09 来源：法制日报
昨天（11日），广东省中山市中级人民法院对一宗涉港租赁合同纠纷案作出一审宣判，据了解，这是内地法院首例适用香港法律判决的案件。原告钻石租赁公司和被告之一荣辉科技公司都是香港企业，双方的租赁合同被法院判令解除，承租人荣辉科技公司被判令返还租用设备。
据了解，双方的纠纷因被告荣辉科技公司违反租赁合同约定而起。原告钻石租赁公司诉称， 2002年11月22日，双方签订《租赁合同》，约定由荣辉科技公司向该公司租赁有关机器设备，该公司已依合同约定将租赁物交付被告使用，而实际使用人为荣辉电子(中山)有限公司。但荣辉科技公司却违反合同关于支付租金的约定，自2003年9月开始就未支付任何租金，其行为已构成根本违约。钻石租赁公司向法院请求判令解除合同及两被告交还租赁物。
“本合同在各个方面均受香港法律管辖，并按香港法律诠释。出租人与承租人愿受香港法庭司法管辖权的管辖，而出租人可在任何其他主管的司法管辖区法庭强制执行本合同。”双方在《租赁合同》第16条对解决纠纷适用法律作了约定。
由于钻石租赁公司和荣辉科技公司对双方发生纠纷适用的管辖法律约定为香港法律，中山市中级法院要求钻石租赁公司就法律适用进行举证。钻石租赁公司提供了由香港“的近律师行”出具的《法律意见书》，对租赁协议的相关约定提出了法律意见。对于违约责任，该《法律意见书》认为，根据香港法律，荣辉科技公司没有根据该协议的条款按时支付租金时，钻石可根据该协议的条款以书面通知立即解除该协议，并承担相应的违约责任。
中山中院认为，由钻石租赁公司提供的经香港注册专业律师作出、并由司法部委托公证人见证、法律服务公司转递的《法律意见书》，不仅提供途径规范、合法，其阐述的香港法律内容，也符合香港基本法规定的司法原则，并且没有违反我国法律的基本原则和社会公共利益。由此，可以采信。
中山中院遂作出一审判决，判令解除原、被告签订的《租赁合同》，荣辉科技公司于判决发生法律效力之日起3日内返还向钻石租赁公司租赁的所有机械设备。36500元的案件受理费，由两被告共同承担。
据中山市中级法院民四庭法官陈薇介绍，适用域外法审理案件有两种情形：一是如果争议双方明确约定适用域外法且约定有效的；二是争议双方没有约定，但根据最密切联系原则，与纠纷有最密切联系的法律是域外法的，也可以适用。（记者 邓新建 通讯员 吴娇）
法官说法
关于本案的管辖权，主审法官陈薇指出，钻石租赁公司和荣辉科技公司在《租赁合同》中有关于双方纠纷司法管辖的约定，即出租人与承租人愿受香港法庭司法管辖权的管辖，而出租人可在任何其他主管的司法管辖区法庭 “强制执行”本合同，意思就是双方因《租赁合同》而产生的纠纷，出租人除接受香港法庭的司法管辖外，还有权在其他与纠纷相关的司法管辖区域使合同得以强制履行。由此，该合同约定的香港法庭对其争议享有的管辖权，实际是一种非排他性管辖权，即并没有排除其他国家有管辖权法院的管辖权。
这一点，在双方同日签订的作为《租赁合同》附件的《购买协定》中有更进一步的明确：协定对管辖约定为双方同意接受香港法院对有关协定的任何诉讼及法律程式行使“非专有的司法管辖权”。因此，钻石租赁公司有权向除香港法院以外的其他有管辖权的司法管辖区法庭提起本案诉讼。荣辉科技公司以融资租赁的方式，向钻石租赁公司租赁由其指定购买的机械设备(货品)，以供荣辉电子公司使用。由此，本案合同的履行地在荣辉电子公司所在的中华人民共和国内地；同时本案争议的标的物机械设备也位于我国内地。因此，钻石租赁公司向中山市中级法院起诉，符合《中华人民共和国民事诉讼法》第二十四条关于地域管辖以及该法第二百四十三条的规定，中山市中级法院对本案享有管辖权。
Posted by Richard at 4:32 PM | Comments (4)June 14, 2007
Comments: A Note to Readers
Over the years, those who have added their comments directly underneath a post have been in the large part agreeable and positive.
On the other hand, readers with ideas contrary to my own, seem to send email directly to me. Sadly, they do not, for some reason, choose to post directly on the weblog. Without your permission, I will not take the comment you've sent me personally, and tack it onto the blog. The readership in general loses the opportunity to learn from you.
Any comment, whether in agreement or not, made in the positive spirit of debate, is valid. You are encouraged to disagree.
Posted by Richard at 1:14 PM | Comments (0)A Link to Martin Wolf on "the Strange World Economy"
Not directly related to China, but worth your time:
Martin Wolf, Villains and Victims of Global Capital Flows
June 12, 2007
Danone Sues Wahaha -- Accuses Partner of Parallel Operations
Danone is now sadly forced to wash its dirty linen in public:
"After a long investigation, Danone officials concluded that their closest partner in China, Wahaha’s longtime chairman, Zong Qinghou, was operating a series of secret companies outside the joint venture — companies that were mimicking the joint venture and siphoning off millions of dollars."
This has happened numerous times in the past -- the most famous case being the American paper company which set up a joint venture factory in the early 1990s, only to find that its partner had set up a factory across the street in competition with it, making use of the machinery, workers and expertise the American company injected into the venture.
Who says history doesn't repeat itself?
Posted by Richard at 11:38 PM | Comments (2)June 11, 2007
Accurate Valuation of China Stocks 65% Lower?
An article worth reading in its entirety, from Bloomberg:
China's benchmark CSI 300 Index would need to fall as much as 54 percent to come in line with the price-to-earnings ratio of Hong Kong's Hang Seng China Enterprises Index, which tracks shares of 41 mainland companies listed in the city. The CSI 300 would have to drop 65 percent to match the average multiple for Chinese shares traded in Singapore, according to calculations by Bloomberg.
Whatever "fair valuation" may be, other than the price people are generally willing to pay, a comparison between the Singapore and China stock indices -- their companies experiencing very dissimilar economic prospects, not to mention the hoopla and ballyhoo for everything Chinese -- does not seem especially relevant. More relevant is this: the ethereal nature of the financial statements issued by the average listed Chinese company and its widespread disregard by tens of millions of investors.
Posted by Richard at 3:56 PM | Comments (0)June 9, 2007
China Rejects U.S. Food Imports!
More of the old back and forth.
Only a piddling amount of money is involved -- as yet -- if any. It appears to be a simple statement without any details of the offending shipments. Did it really occur, i.e., is it an agressive tactic or only a mouthful of threat?
But that's not the most important question. Instead: who'll cave when the stakes are truly high? Will the Americans even last that long?
UPDATE (June 28, 2007)
From the New York Times:
The Food and Drug Administration today issued an alert challenging imports of five major types of farm-raised seafood from China, including shrimp and catfish, because testing found recurrent contamination from carcinogens and antibiotics.
The alert means that the fish will be allowed for sale in the United States only if testing proves that it is free of certain antibiotics and carcinogens
UPDATE (June 29, 2007):
American consumer reaction to Chinese food imports has been overwhelmingly negative. See for example this page.
Posted by Richard at 4:29 PM | Comments (0)June 7, 2007
Check Your June Issue of the ABA Journal
Those of you who are members of the American Bar Association may wish to check your June issue of the ABA Journal, where your editor, Rich Kuslan, is quoted. See Terry Carter's article, "A Chinese Puzzle," on page 30. Interesting compilation of ideas, focusing on ethics as they appear to apply to foreign firms in China, but touching briefly on marketing. Dan Harris of China Law Blog and Matt Adler of DLA Piper were interviewed as well. Here's the link.
Posted by Richard at 2:21 PM | Comments (3)June 4, 2007
China CSI 300 Index Plunges 7.7%
Another remarkable drop.
6月1日，湖北宜昌股民在观看股市行情。据交易所公布的最新数据显示，截至周五（6月1日）收盘，沪市总市值为133455亿元，流通市值37590.24亿元，不过平均市盈率由周四的43.44倍上升至周五的44.24倍；深市总市值为40253亿元，流通市值为20533亿元；两市总市值为173708亿元，较周四缩水5610亿元。
Bloomberg takes it calmly.
Chinese media outlets stress instead the need for calm.
国内三大证券报6月4日纷纷刊登评论员文章，告诫投资者冷静、全面、深入认识和理解印花税政策，理性预测未来市场走向。管理层上调印花税出发点是抑制过度投机，以避免更大的系统性风险，阶段性市场调整不会改变牛市之基本面Posted by Richard at 2:08 PM | Comments (1)
