Within a two-minute walk from my apartment in Shenzhen, there is ample evidence that intellectual property, particularly American, is not very well-protected in China. Nighttimes, three different vendors set up their folding tables on the main street with pirate DVDs by the carton-full, including many of the latest Hollywood releases. Cost: RMB5 each, or 73 cents each.

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Termination due to financial difficulties

Under the second financial difficulties option, Article 41 of the PEL provides that employer may terminate employees without their consent. Under this option, employment may be terminated and, but for a one time severance compensation to be paid at the time of termination, the employer will no longer be required to…

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Many small and medium sized companies that engage in OEM manufacturing/ outsourcing in China fail to take the steps necessary to protect themselves. When problems arise, they can do little or nothing to protect themselves because they have no legal basis for protection. The fact is that outsourcing disputes must be resolved in China, under the Chinese legal system. The Chinese legal system has improved greatly over the past ten years and taking a few…

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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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For the last few years, one of the main themes of this blog has been how China has and will continue to increase its enforcement of its commercial laws, particularly as they apply to foreigners. We have written about the increase in crackdowns on those in China without the proper visa, about closing of unregistered businesses, the need to comply with the Labor Contract Law, and a stepping up of environmental enforcement. I’d like to take some of…

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