Chinese lawyers

[Randy W]

An interesting view of Chinese lawyers and Chinese law from the Harris-Bricken law firm

https://harrisbricken.com/chinalawblog/chinese-company-lawyers/

from China Law Blog on Facebook
https://www.facebook.com/ChinaLawBlog/posts/10158350100976109

Chinese Company Lawyers

Quote

 

In China “the law” is essentially whatever the Chinese government says it is. As an example of this, if some new kind of business is started in China that is so new to the CCP’s slow-moving bureaucracy that it hasn’t figured out whether it should be legal or illegal, it may be “tolerated”. Your business may be tolerated, then the Chinese government says it is “illegal”, or it may be tolerated, then the government says it is “legal”. Then it might switch from “legal” to “illegal” and told to shutdown almost overnight. This happens, and continues to happen all the time. See e.g., China’s Tutoring Ban Leaves a Trail of Debt, Anger, and Broken Dreams.

Here’s another example. The Chinese government says that new businesses in China have to list their “business categories” and the business they are in. Think about it; does this make sense? From a business point of view, it makes no sense. Let’s say your Chinese company registered as a consulting business but it now needs to do a marketing survey for a client who wants to enter the Chinese market. So though it makes perfect business sense to do this sort of survey, the Chinese bureaucrats and regulators prevent it from doing so, because in their view government regulators categorizing businesses makes more sense.

Among Chinese business people, there is a large degree of frustration at these sudden changes which come out in the morning, and may change before the sun goes down. For Chinese entrepreneurs, this is the face of the law.

So, in order to succeed, Chinese companies spend large amounts of time avoiding the regulators and getting warned, or even shut down. If a regulation comes from Beijing and their company is in Guangzhou, the Chinese company will go talk with Hangzhou city government officials to avoid getting crushed because local Chinese officials have the power to “interpret” the law. Sometimes this means ignoring what Beijing says, without openly confronting Beijing. Not a lot of need for lawyers in these scenarios.

All this leads Chinese companies to view the law as random and to be avoided and when Chinese companies go overseas, their views and actions do not change. They fail to realize that the law can actually help them and so they see no point in using lawyers unless and until they are in big trouble, and even then they do not for the most part know how to use them.

 . . .

But things do change and they will change. Our best corporate clients are those who have been through litigation and once Chinese companies start getting sued in the United States they will come to realize the importance of preventative lawyering. I have seen this with our Russian and Mexican and Spanish and Korean and Malaysian clients and I expect it will eventually happen with Chinese companies as well, though I have to admit that it does seem to be taking a lot longer for them.