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Experiencing China EDITOR'S NOTE: Willis (Bill) Whichard is a former member of the North Carolina State Senate, a former Justice of the North Carolina Supreme Court and has recently retired as Dean of the Law School at Campbell University. He and his wife Leona are part-time residents of Clay County. A report of his trip to China is being published as a 12-part series in the Sentinel. Part X - Doing business with the U.S. Most of our day on Tuesday, October 17, was consumed by travel from Guilin to Shanghai. We checked into our very modern Shanghai hotel in mid-afternoon and had a bit of time for walking in the area before departing for dinner. Following dinner we attended, as a group, the Shanghai Acrobatic Show. On Wednesday, October 18, we spent the morning in a professional exchange with the M&ALaw Firm. This is a comprehensive law firm with 50 lawyers in Shanghai and branch offices in other Chinese cities. Protection of intellectual property is a huge issue in China. The opening speaker noted that in the 1840s the U.S. was where China is today in this area. Charles Dickens' novel "A Christmas Carol" sold for the equivalent of $25 in England and $.06 in the U.S. Dickens pleased for the U.S. to subscribe to the international copyright system. He made himself unpopular by harping on this on his first trip to the U.S. So, our speaker concluded, perhaps this is just a historical stage for China. There is a profit of 900 percent on pirated property. As a result, even the terrorists are participating. Most of our day on Tuesday, October 17, was consumed by travel from Guilin to Shanghai. We checked into our very modern Shanghai hotel in mid-afternoon and had a bit of time for walking in the area before departing for dinner. Following dinner we attended, as a group, the Shanghai Acrobatic Show. On Wednesday, October 18, we spent the morning in a professional exchange with the M&ALaw Firm. This is a comprehensive law firm with 50 lawyers in Shanghai and branch offices in other Chinese cities. Protection of intellectual property is a huge issue in China. The opening speaker noted that in the 1840s the U.S. was where China is today in this area. Charles Dickens' novel "A Christmas Carol" sold for the equivalent of $25 in England and $.06 in the U.S. Dickens pleased for the U.S. to subscribe to the international copyright system. He made himself unpopular by harping on this on his first trip to the U.S. So, our speaker concluded, perhaps this is just a historical stage for China. There is a profit of 900 percent on pirated property. As a result, even the terrorists are participating. Since becoming a member of the World Trade Organization (WTO) in 2001, China has begun to address intellectual property issues. They do not have a well-knit system, but there is a preliminary injunction procedure. A recent case held a landlord liable for his tenant's sale of unauthorized branded goods. Counterfeit goods are obviously a huge problem. A foreign company trying to enforce intellectual property law is given preferential treatment in Chinese courts. The Chinese lawyers asserted that they work with the police in investigating these types of violations. They concede that change is necessary in this area. Getting a judgment in China is easy; enforcing it, however, is difficult. A contract in English will be enforced in China, but the parties have to provide the English translation. The consequences of lying in trials appear to vary with the matter at issue. The judge may merely reprimand in less serious matters , but in more serious matters the punishment can be severe (they were not specific on this, however). We had seen large numbers of tour buses in China and wondered about liability for their accidents. The answer we were given was that the traffic police will investigate and determine fault. If the driver acted purposefully, there will be criminal responsibility. If mere negligence was the cause, it is a civil case only and insurance, which is mandatory, will cover it. The compensation system for industrial accidents is complex. If the injury occurs in a province, there will be social welfare from a local government. Those who come to the cities are compensated by required insurance. Contract disputes between Chinese firms and foreign companies are mainly dealt with by arbitration. There is little movement toward the use of mediation, which is not binding. In the afternoon Scott Guan, with his partners at the J&F Law Firm, gave us a good introduction to issues of concern to American lawyers wanting to do business in China. Scott holds the LL.M degree from New York University and the S.J.D. degree from the University of Toronto. He spoke excellent English, which meant we did not need an interpreter and did not lose nuances of language in translation. The legal profession was quite prosperous in Chine in the 1930s, Scott told us. Then came the chaos of the Communist takeover and the Cultural Revolution ("no law and no lawyers"), and the substantive ground on which the profession could function disappeared. As a consequence, the rule of law is a relatively new concept in China today. In the late 1970s and the 1980s the government was focusing its energy on economic development. When the economy is taking off, there is a need for lawyers; thus, the profession gradually made a comeback. Initially, law firms were state-owned and lawyers were government employees.
All in all, this was one of our more interesting and informative sessions.
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