The Shanghai Lawyer
Vol. 2 , No. 2 - February 28, 2003
Shanghai is one of the most dynamic and fastest growing mega-cities in the world. It is quickly establishing itself as the leading financial and economic center of the Far East, on par with the likes of Paris and New York. The Shanghai Lawyer is a bi-weekly publication providing up-to-date newsworthy articles and legal information to professional and business persons around the world. We hope you enjoy the newsletter and welcome your comments and feedback.
Letters from Shanghai
Having recently bought an apartment in Shanghai, I can say with some authority that it is a sellers' market and buying an apartment can be of a bit of an adventure. After paying a deposit and signing an agreement on my dream flat overlooking the Suzhou River, I was informed by the property developer (rather I finally dragged it out of them after running into obstacle after obstacle to close the deal), that they had sold my unit, (the last unit of that design in the building I should add), to a buyer who paid cash for the entire purchase price. They had been deliberately putting up obstacles in the hopes that I would just go away.
What was so unbelievable about the whole matter was not really that they sold the unit out from under me, but their indifferent attitude. The manager of the sales office who it turned out was the one who made the illegal sale was like, "What, what was I supposed to do, the other buyer paid cash upfront?" (and likely a little cash out back too). Although the developer properly acknowledged they were at fault and could not possibly win a lawsuit, they were satisfied with the knowledge that the most they would be responsible for under Chinese law would be a sum equal to twice my deposit. They had obviously been through this process before.
The only thing that appeared to faze the manager was the possible inconvenience we might cause to her personally if we started making waves in her company, not the money the developer would have to pay, nor any unethical action she may have committed. She made it be known that we had another option, and that was to buy another unit, albeit larger, in the same building, and she would give a much deeper discount than she was willing to give on the original unit. In the end, I went for this other unit as it still met all my requirements and a great view and location. I love my new place and I love it when things work out like this.
By - Blaine Turnacliff You may contact Blaine directly at bturnacliff@lehmanlaw.com | |
Did you know?
The Chinese national government has allocated Shanghai the same status as a province. The municipality of Shanghai is roughly the size of the state of Delaware. |
Chinese Style Viagra on-the-loose in Shanghai
Jianyang Capsule, a kind of Chinese-style Viagra, has been put on sale in the drug stores in Shanghai. It is the first time the traditional Chinese medicine (TCM) medicine for erectile dysfunction (ED) has been made available outside hospitals.
Some Western drugs, including Viagra, have been in China for several years but as non-OTC medicines, they are only allowed access in hospitals. Many Chinese buy kidney medicines in an effort to handle ED, but they are generally ineffective, said Lu Zuqiang, sales manager of the Guizhou Jianxing Medicine, producer of the Jianyang capsule. According to Lu, some drugs composed of the banned ingredients of Viagra are sold on the black market.
The Jianyang Capsule is the first homemade ED TCM drug approved by the government, said Lu, and they hope to snap up a large market share. The medicine is expected to be sold in some 500 drugstores in Shanghai soon.
Statistics show that one quarter of Chinese males suffer from physiological or psychological sexual dysfunction that causes problems such as ED. Due to a richer lifestyle causing cardiovascular disease, high blood pressure and diabetes, the incidence in the coastal areas where the economy is more developed is two to three times higher than those in inland regions.
Last year, Viagra saw a sales volume of nearly 50 million yuan (6 million US dollars) in the mainland areas of China. The annual sales volume of medicines coping with ED is estimated at 2 billion yuan (241 million US dollars) in China.
(Source: Xinhua News Agency)
Shanghai Essentials
Starting March 1 2003, Shanghai government is scrapping the restrictive laws regarding foreign ownership or leasing of commercial properties. Up till now, foreigners have only been able to buy land for commercial use that was specifically approved by the government. The new rules will give overseas businesses access to all properties, especially cheaper properties formerly reserved for domestic companies. These changes should give Shanghai the country's most liberal commercial property laws in China, which will make it even more attractive for foreign businesses. |
Shanghai Appoints New Mayor
A new mayor of Shanghai - the youngest person to lead the country's financial capital since the communists began ruling China in 1949 - was appointed by the municipal political body that chooses city leaders, official media reported on February 21.
Han Zheng, the city's vice mayor, was officially elected by the 12th Shanghai Municipal People's Congress, the official Xinhua said. Mr. Han won 842 ballots from a total of 849 congress deputies, the state-controlled newspaper China Daily said on Friday. He replaces Chen Liangyu, who was promoted to the post of Communist Party secretary for Shanghai and had been a vice mayor before he became mayor.
Mr. Han, who was born in 1954, is the youngest mayor Shanghai has had since the communists took power in 1949. It quoted him as saying that he wanted to make sure Shanghai became ''more competitive in all aspects.'' The Shanghai mayoralty is considered an important post for rising political stars, not only because the city is China's financial capital but also because the current president, Jiang Zemin, once held the job.
Mr. Jiang shot to prominence when he peacefully defused pro-democracy protests in Shanghai in 1989. Senior leader Deng Xiaoping brought Mr. Jiang to Beijing to be general secretary of the Communist Party.
Mr. Han, who has a master's degree in economics, has worked in the chemical industry and for the Shanghai No. 6 Rubber Shoes Factory. He entered politics with a position as secretary of the Communist Youth League of China's Shanghai committee. He then held a variety of posts in the Shanghai government before he was promoted to vice mayor in 1998.
(Source: South China Morning Post)
Overseas Professionals Returning to Shanghai
Overseas-educated professionals returning home have set up more than 2,400 enterprises in Shanghai, with investment topping US$420 million. Shanghai, like a huge magnet, has been drawing back a growing number of Chinese professionals from overseas, said Tang Weimin, director of the Shanghai Service Center for Overseas-Returned Students.
Those talented personnel returning from abroad are running many new and high-tech enterprises involving information technology, biological medicines, automobile manufacturing and new materials, and contributing much to the city's economic development. Newly developed products made by firms run by them have gained their own intellectual property rights, filling in blanks in certain domestic scientific research sectors.
Shanghai's municipal government, in its urgent search for competent, skilled people, had drawn up a series of preferential policies and measures to encourage more overseas-educated professionals to return. For example, the municipality granted those businesses run by overseas-educated professionals the same preferences as those run by overseas Chinese.
The requirements for setting up such businesses had also been relaxed, with a minimum registered capital reduced to US$12,000 for running consultancy services, US$62,000 for managing production companies, and US$100,000 for firms dealing with international trade.
Enterprises run by returned overseas-educated professionals now enjoy tax reductions or exemptions to some extent in certain sectors. Moreover, the municipal government has also set up five development parks for the returned students in the suburban Zhangjiang, Jiading and Caohejing areas.
(Source: Xinhua)
Shanghai legal problem? Tell us about it. . . Mergers & Acquisitions * Incorporations * Commercial Contracts Contact Blaine Turnacliff at bturnacliff@lehmanlaw.com |
Shanghai's Famous Brands Being Ripped Off
It has emerged in a recent report that more than 80 percent of Shanghai's most recognized trademarks have been infringed. The old Chinese saying that "fame portends trouble" holds true for many companies in Shanghai that have won wide public recognition for their brands.
When Zhending Chicken, a fast food restaurant offering Shanghai-style chicken dishes, became popular among local consumers few years ago, lots of fast food restaurants copied its business techniques by using a similar logo and putting similar Chinese characters on their signboards. "Many consumers think these restaurants are part of our business but actually, they have nothing to do with us at all," said Liu Dingzhao, who owns the restaurant.
The Trademark Bureau is pushing the local People's Congress to draft a law on the issue. The law, as the bureau officials see it, should contain provisions so that if trademark owners feel their interests are damaged by companies whose names are similar to their trademarks, they should have the right to ask the bureau to cancel the names. Specific punishments for violators should also be spelled out, they say.
However, even if the bureau succeeds in its lobbying for legislation, it admits it is still far from claiming victory in the battle, as many violators originate from out of town, especially in Jiangsu, Zhejiang and Guangdong provinces.
"Making a law to protect Shanghai-registered trademarks is only one step," said the bureau's Zhang, "We will also seek more co-operation from related governments in China.''
(Source: Shanghai Daily News)
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Shanghai Airports Among World's Busiest
Hongqiao and Pudong, the two airports of Shanghai, have been listed at the top of a list of the world's busiest airports. There were remarkable increases in both passenger and cargo transport, according to local aviation sources.
Direct air flights from Shanghai to 100 domestic and overseas cities are now available and 51 domestic and overseas air companies are operating flights to Shanghai. Investments have been made in recent years to improve the infrastructure of both airports.
New opportunities have been brought to the two airports due to Shanghai's sustained economic growth and the city's successful bid to host the World Expo in 2010, he added. The second phase of the expansion of Pudong Airport, with a total investment of 10 billion yuan (about 1.21 billion US dollars), will begin this year, and a second runway will be added in 2004 and a second terminal in 2007.
(Source: Dow Jones News)
Shanghai, leading recipient of Chinese capital
Shanghai has become a leading recipient of capital, not only from abroad, but also from other parts of the country. Last year the city accumulated 50.65 billion yuan (US$6.102 billion) in investment from other parts of China, representing a year-on-year increase of 84.6 percent, with a daily average at 130 million yuan (US$15.66 million).
According to the latest statistics from the local bureau for industry and commerce, 6,427 wholly-owned or controlling enterprises were set up in Shanghai last year by Chinese businesses outside Shanghai, with each having a registered capital of over 1 million yuan (US$120,000). Their combined registered capital was 54.64 billion yuan (US$6.58 billion).
The catering and manufacturing sectors ranked first and second respectively among Shanghai industries in terms of capital absorbed from other parts of China. The property development business also attracted big capital in 2002; with investment from outside the city double that of the previous year.
Beijing ranked first in terms of registered capital for enterprises it launched in Shanghai, which amounted to 22.99 billion yuan (US$2.77 billion) last year. It was followed by Zhejiang and Jiangsu provinces in east China.
(Source: Xinhua News)
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