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February 2009 Archives

February 3, 2009

Protectionist Policies in the Third World -- India Bans Chinese Toy Imports for Six Months

India's Directorate of Foreign Trade announced last week a temporary ban of six months on Chinese toy imports.

The Toys Manufacturers Association of India said it was pleasantly surprised by the decision of the Commerce Ministry to prohibit shipments of cheap toys from China.

Love that: "pleasantly surprised." Of course, it's all because of safety and quality concerns (heavily spiced with patriotic protectionist sentiment of the industry).

"You see Chinese toys everywhere. The good, upper-end toys are made in India, but the cheap toys in the street and small shops were being dominated by them. They are bringing in toys without safety norms," he said.

This may amount only to another inning in the game of international trade hardball these two nations have played over the past 15 years. Or it may be a harbinger of protectionist policies -- WTO be damned -- that may spread throughout the Third World. We now hear popular echoes -- ones heard and ignored for years -- redoubled in the U.S.

More than half of all Chinese toy exporters are reported to have closed their doors in 2008. Chinese toy exporters who've recently shipped product to China now find their inventory aboard ship unable to offload in Indian ports and probably unsaleable.

“虽然印度不是我们出口的主要国家,但影响肯定存在,特别是对企业士气的消极影响。”中国玩具协会副会长郭卓才表示...“
[Editor's Translation: "Although India is not one of our primary export nations, the effect will definitely be felt, especially a negative effect upon the morale of our enterprises," said Guo Zhuo-cai, the Vice-Chair of the China Toy Association...]

The smaller Chinese factories with overflow and lower quality goods are more likely to suffer from the Indian ban. But protectionist sentiment may have taken root in the Third World. Watch it grow throughout those nations -- indeed, we may see a Chinese response in kind, not simply the bureaucratic nonsense of a WTO dispute China has threatened to lodge.

February 7, 2009

Reverse Discrimination Alleged -- White Executive Terminated by Japanese Company

Van Etten v. Mitsui, 09-cv-1071, brought in Federal Court in Manhattan, alleges that the Japanese company practice of installing a "glass ceiling" above which only Japanese may rise constitutes an unlawful practice of discrimination. [Download the complaint..]

“Mitsui USA and Mitsui Japan have a strict policy requiring that the top positions and virtually any position managing personnel at the company be filled by the all Japanese/Asian staff,” according to the complaint.

Japanese routinely informed me, working in Tokyo and Osaka in the 1980s, that no Gaijin would ever be permitted to manage a Japanese. One Englishman, fluent in Japanese with Japanese wife, had spent 20 years with a major local securities firm. He was promoted to Senior Manager of his department with its one direct report-- himself.

Only within the past 10 years has this taboo been broken in Japan. In 2005, Sony, where I once worked, appointed Howard Stringer as top dog, raising hackles throughout the rank and file. And Sony is regarded within Japan as a company which routinely breaks new ground in HR practices.

However, this suit alleges a glass ceiling in Japanese companies operating in the U.S. Sad to say, I have no recent personal experience directly on point here, i.e. in the U.S.. But, it is, at first glance, an entirely believable claim, based on strongly-held cultural ideas and traditional practices.

Is the executive management of Mitsui and its subsidiaries in the U.S. entirely Japanese? Does the plaintiff speak Japanese? How will the plaintiff prove an unspoken rule -- a silent convention, as it were -- that may no longer be applicable in Japanese companies in the United States? Let's keep an eye on this one.

February 9, 2009

Attorney Scam -- Bank Checks from East Asia and

Very briefly this morning, another article on the scam affecting American attorneys, originating in "East Asia."

"I've had clients from Taiwan and Hong Kong who I've never laid eyes on, and collected unclaimed property for them without any trouble," Sack said. But when a call to Citibank proved this check was invalid, Sack called Eagle Power Equipment. He said he got a laugh from that company's controller, who said he was not only not paying any debts to Tomen, but that he'd been getting calls from small firm lawyers across the country.

Not sure I understand the first sentence. Think I get the middle part. Amazed to read the final sentence. How many "small firm lawyers across the country?"

Massive Fire in Rem Koolhaas Designed Mandarin Hotel Structure

Some have arrived at this blog after searching for news of the fire in Beijing. Here is a link to the most complete news report I've seen yet (in Chinese):

February 11, 2009

Japanese Bar Cracks Down on Foreign Attorneys

Times are tough and guilds are supposed to protect their own, as the Japanese Bar has done, here requiring all foreign attorneys operating in Japan, even, apparently, employees supervised by gaiben partners, to register as gaiben

A requirement that all foreign lawyers be registered as gaiben would fundamentally change the landscape of firms operating in Japan. To qualify as a gaiben, a lawyer must have practiced for at least three years, two of which have to have been outside Japan. The registration process can also take anywhere from six months to two years.

February 16, 2009

EVENT: ABA International Section China Committee Mixer in Shanghai

Sponsor: Shanghai Chapter of the American Bar Association International Section, China Committee

Blurb: Come mix and mingle with attorneys with diverse backgrounds from our legal community here in Shanghai and learn more about the ABA and China Committee activities.

Date: Thursday, March 5, 2009
Time 6:30-8PM
Venue: Mesa Manifesto, 748 Julu Rd (east of Fumin Rd), 巨鹿路748号(富民路东侧)
Tel: (86-21) 6289-9108
URL: www.mesa-manifesto.com
Cost: 120 RMB for members and non-members. Cost includes 2 cocktails/beverages and appetizers

Please RSVP by sending an email to jzhang (at) orrick.com on or before Friday, February 27, 2009.

February 17, 2009

For Your Review: Reverse Discrimination Complaint, van Etten v. Mitsui, 09 cv 1071, SDNY

To download the van Etten v Mitsui complaint discussed in this post, click this link.

February 20, 2009

van Etten v. Mitsui -- A Few Hackles Raised on First Reading

I've now had a chance to review the complaint in Van Etten v. Mitsui, 09 CV 1071, a reverse discrimination class-action suit brought by an American executive of Mitsui USA fired in 2006.

While I was originally favorable toward the idea of such a claim, the complaint itself tends to move me in the other direction. Avoiding the legal issues for the moment, let's look at a number of relevant cultural issues indicated in the text which render much of the complaint less persuasive than hoped for.

Hackle #1

The first hackle on my sensitive spine raised itself in profound discomfort in only the second paragraph of the first page:

Plaintiff brings this action to challenge a pattern and practice of race and national origin discrimination and retaliation committed by Mitsui USA and Mitsui Japan against current and former non-Japanese/non-Asian employees.

This last phrase -- non-Japanese/non-Asian -- is curious in itself. Does this equate Japanese with all Asians? Or does it make a distinction between the two?

And besides, what is an "Asian?"

For several centuries, the word “Asia” referenced a geography of indistinct determination, stretching from Syria to Japan, and from Siberia to the Andaman Islands, encompassing all nations, races, skin colors, languages, cultures. Essentially, a mishmash, due in large part to the impoverished understanding of Western explorers and mapmakers.

However, no Chinese I know would wish to be lumped together with a Japanese, or mistaken for him, and vice versa. Nor would a Taiwanese wish to be lumped together with the Shanghaiese, etc. But Westerners who didn’t know better, for no fault of their own -- they were only just coming in contact -- essentially classified everyone who lived in basically the same place: faraway.

Along comes 20th-century America, with its increasingly fractious ethnic and racial "melting pot," the elements of which, despite their occasional averments to the contrary, make strong demands for what they see to be their own people, community, tribe, but not for the community at large. Over time, the law recognizes certain races and ethnic groups, providing benefits to those with specific attributes. A census must be taken every decade and various groupings are statistically analyzed. It is a convenient shorthand to group Indians, Chinese, Japanese, Papua New Guinean aborigines, Uzbeks and Fijians into one mother lode of a political grouping, the sheer weight of which would seem to have somewhat nearly the political capital other large groups like blacks and Hispanics would have.

But there is no such thing as an "Asian." (Well, perhaps there is under federal law, but that fantasy I will avoid for the moment.) Things are too complex for this now rancid simplification.

In the complaint under discussion, the phrase “non-Japanese/non-Asian" is particularly troublesome.

Note this paragraph 18:

One of the central elements of the pervasive discrimination at Mitsui USA and Mitsui Japan is the use of and favorable treatment towards "rotational staff," who are employees of Mitsui Japan set to take tours or rotations with Mitsui USA, usually for a term of three to five years.

Rotations are common in international corporations, especially among Japanese companies, for whom the practical experience of in-country work and residence has always been held to be invaluable. It is a practice Americans have cut out of their budgets, much to their discredit and disadvantage. The bias away from direct in-country knowledge within the American company is, in my opinion, a substantial reason for American loss of market share globally. How is it, do you think, that the Japanese automakers have learned so much about operating successfully in the United States, while we now see the American automakers on bended knee begging for government assistance?

Generally speaking, who is rotated out of Japan? A young Japanese with some in-country skills or scholarship who shows promise -- someone who is marked for his potential to rise perhaps 10 or 20 years down the road.

I very strongly doubt that any non-Japanese -- the “Asian” referred to in the complaint -- would be drawn from India or China into a rotation into the United States. In fact, none is mentioned. No one without a Japanese surname, with the exception of a reference to two former complaints by Americans against the company, is even mentioned in the entire complaint.

To what classification is the complaint referring with the phrase "non-Japanese/non-Asian?" It is this ill-defined phrase, which recurs dozens of times in the complaint, that thoroughly confuses things for me. The fact finder may not find it so, relying upon the common Western conglomeration of all things "Asian."

But if I were the defense, I would attack it.

Hackle #2

My jaw dropped when I read paragraph 67:

Mr. Van Etten was also disadvantaged within Mitsui USA by the fact that Japanese was used to communicate, orally and in writing, throughout the day by top Mitsui USA/Mitsui Japan executives as well as with/by their underlings. This practice was rampant, notwithstanding the fact that non-Japanese/non-Asian employees would not be able to understand, leading to greater isolation and exclusion of non-Japanese/non-Asian employees. By way of example only, Mitsui USA held monthly, quarterly and annual business meetings where Mr. Van Etten's business was discussed, but the meetings were conducted in exclusively Japanese and no national staff were included.

This is an extraordinary assertion and, in my eyes, damns the plaintiff and not the defendant. Essentially, it makes the claim that, for purposes of employment discrimination claims, all communication must be made in the English language.

The plaintiff, thus, despite having worked for a Japanese company for 18 years, had never learned the language of its parent company. In his position, most likely, he would not have to. But what language would he speak if were he to become a top-level executive having to make his reports to headquarters in Japan? English? If the plaintiff had been thoroughly fluent in Japanese, had lived and worked in Japan and possessed the very significant in-country skills required of a top-level manager, I would give greater credence to his claim.

But it is entirely unpersuasive to suggest that an American employee of a Japanese subsidiary without such skills is thoroughly qualified to take on a senior role, which would include significant, perhaps daily, contact with headquarters, and an understanding of Japanese practices in the home office. Life is very different in the office in Tokyo than it is in Manhattan.

Hackle #3

By his own complaint, Mr. Van Etten was extremely accomplished -- a producer. He claims that his termination for discrepancies in expense reports dating to 5 years prior was, in a nutshell, trumped up because he complained vociferously about discriminatory practices.

In and of themselves, these factual allegations, as written, do not portray him as one particularly suited to the resolution of a major dispute within a Japanese company. He must have some skills, because he lasted in there a long time, and life is tough going in a Japanese company.

But the complaint shows him to be repeatedly complaining, over the course of several years, orally and in writing, while hinting at a distinct lack of respect for many of his colleagues. While the record of complaints may be necessary evidence to show notice, it, on the other hand, gives us a clue as to the tension in the office that appears to have surrounded this issue.

Read this from paragraph 84:

...Defendants admit that Mr. Van Etten complained that the rotational employees were not qualified for the positions they held and that the practice of bringing Japanese/Asian executives from Japan amounted to discrimination against non-Japanese/non-Asian employees could have been awarded these positions. They also admit that Mr. Van Etten complained that he should have been promoted to general manager and was not because he is not Japanese/Asian.

Numerous incidents, involving HR and executive management, are detailed in the complaint.

While Japanese are more likely to expect open friction within an American workplace, and rather more tolerant of it, it is still considered at the very least unpleasant. Often, when taken to extremes, it becomes a distinct mark against the one who breaches that etiquette.

This is not to say that resolutions are always possible in a Japanese company -- often not -- but simply that jousting is the art of remaining hidden, while advancing in plain sight. Mr. Van Etten may be a complete gentleman in an American sense and he may have comported with the law, but the facts as related by his attorneys give the impression that his repeated straightforward complaints to HR and, more importantly, to Japanese senior colleagues accelerated the movement of the grindwheel, upon which the ax was finally sharpened.

The complaint raised other hackles as well, including the assertion that discipline was more tolerant of Japanese than of Americans, which assertion I find -- based on my own experience and that of other foreigners I know in Japanese enterprises -- almost totally incredible.

I am eager to read Mitsui's answer. More on this case as it develops.

February 24, 2009

China: A Couple of Former Billionaires, Fraud, Bribes, Prison

Recommended: this story -- Jailed Billionaires Show New Face of China as Markets Unravel -- rich in detail, like this:

Greaves hasn’t seen or spoken to Huang, 39, since. One morning in November, the dapper, baby-faced tycoon failed to turn up, along with his Maybach limousine, at Gome’s Beijing headquarters, where he normally worked such long hours that he had installed a double bed in the office adjacent to his own.

Well-worth reading.

About February 2009

This page contains all entries posted to ASIABIZBLOG in February 2009. They are listed from oldest to newest.

January 2009 is the previous archive.

March 2009 is the next archive.

Many more can be found on the main index page or by looking through the archives.

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