Ratcheting Up the Criticism of Performance Ratchets in China

In an interesting discussion a couple of weeks ago in Shenzhen with a very smart and capable lawyer (Ke Luo of Fangda Partners), I learned about a small, but growing backlash against the Top Tier private equity firms working China. Evidently there have been some articles in the Chinese press voicing criticisms of…

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There are, unfortunately, times when contracts, for whatever reason, need to be voided. The problem is, when can contracts legally be voided in China? There are specific circumstances when this indeed can be done. But to make it work, you have to meet specific legal criteria.

The key to understanding these types of contracts is to note when they are actually voidable. There are…

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The meeting was over. Mr. Smith walked away happy, thinking they had decided to do X. Mr. Chen walked away happy, thinking they had decided not to do X. Both remained happy, or did until Smith phoned Chen asking why he wasn’t doing what they decided upon. Hearing this, Chen asked Smith, “What do you mean?
I am doing what we decided upon!” Happiness (on both sides) was now replaced by an uglier feeling: mistrust. Not a good foundation to build a business…

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• Exhibitors

If the exhibition has an official website, you may be able to examine a list of exhibitors who will attend the exhibition or who attended the exhibition in previous years. From this you will be able to judge whether the exhibition is suitable for you to find proper Chinese suppliers, and you can especially look out for the following:

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Importers often find themselves in an uncomfortable situation. They are legally and financially responsible for what they let their suppliers ship. But their tight margins often cannot support audits of each factory and quality inspections at every stage of every production run. So, what should they do? Of course, quality control is usually a necessity for importers. But the fastest way to decrease sourcing risks lies in a better organization, on the importer’s side. In this…

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