Legal & Regulatory
By Zolzaya Erdenebileg
Coworking and incubator spaces have expanded quickly throughout major cities as China’s entrepreneurial drive accelerates. The government had been slow to regulate coworking spaces; the use of such addresses for business registration, for example, has floundered in ambiguous territory.
However, several industry observers told China Briefing that the government is working on a regulatory framework for the coworking industry and its tenants.
This follows recent media reports that said the Administration for Industry and Commerce (AIC) in several Beijing districts have refused business registration applications that have coworking spaces listed as their address. According to the reports, authorities have refused applications listing coworking and incubator spaces in Chaoyang, Fengtai, and Haidian districts.
The development is not unique to Beijing. Over the past year, industry sources have reported increased regulatory oversight of coworking spaces all over China, including other tier one cities.
By Srinivas Raman
China is undergoing an environmental paradigm shift, transitioning from the world’s top polluter to global leader in the fight against climate change. In recent months, China has dramatically strengthened the enforcement of its environmental regulations as it pursues its goal of promoting ‘ecological civilization’, and has inspected and fined countless businesses in the process.
Many areas in China suffer from severe levels of pollution, and the central government under the leadership of President Xi Jinping has initiated several crackdowns on heavily polluting industries that are non-compliant with current environmental regulations. These measures have affected business as usual in various sectors and have had rippling effects throughout the economy.
Op/Ed by Michael Mudd, Managing Partner, Asia Policy Partners LLC
The EU – via the EU Commission – has enacted two key regulations relating to data processing: the General Data Protection Regulation (GDPR) and the Network and Information Security Directive (NISD). While both came into force in April 2016, they will not apply until May 25, 2018.
When the GDPR comes into full force, any company based in Hong Kong, or anywhere else for that matter, will need to have governance policies in place if they solicit or target, collect, store or process any data on a citizen of the EU. Despite the ‘Brexit’ filing, this also means UK citizens for the foreseeable future.
A recent survey by the UK Chartered Institute of Marketing indicated that only five percent of marketers say they wholly understand what the GDPR means for their business.
Half say they don’t know anything about it at all and a surprising 16 percent do not think GDPR is relevant to them. Heavy fines await businesses that are not compliant – fines for breaking the regulations are capped at US$23.3 million or four percent of global turnover, whichever is higher.
By Dezan Shira & Associates
Editors: Jake Liddle and Gidon Gautel
In recent years, the government has introduced a number of policies and reforms to improve investment conditions and the ease of doing business in China. Many experienced China hands assert that these reforms are often a case of “two steps forward, one step back”, but this view overlooks a broader positive regulatory trajectory that competitive foreign investors can manage to their benefit.
The government’s new Cybersecurity Law, and its data localization requirements, caused some foreign investors to lose confidence in China. New processes for business registration and work permits have frustrated China-based expats that are used to the status quo. Within the larger reform trajectory, however, constructive observers find more practical reforms designed to help the country transition from an economy driven by heavy manufacturing, to one led by technology and innovation.
By Srinivas Raman
Last year, Michael Jordan finally received a favorable verdict from the Supreme People’s Court in China. The verdict came after a long drawn out legal battle against Qiaodan Sports, a multi- million dollar Chinese sportswear company who was using the Chinese transliteration of Jordan’s name as its registered trademark.
After losing several cases before the lower courts, this victory comes as a huge relief for Jordan as well as many foreign firms doing business in that are similarly plagued by trademark squatters liked Qiaodan.
However, this case goes to show risks of trademark squatting and the rigors of Chinese legal system – even internationally recognized brands like Jordan’s are not safe in China. Other foreign brands – such as Apple, Google, and New Balance – have also faced similar challenges in China and have lost millions of dollars as a consequence.
By Srinivas Raman
China recently abolished an archaic FDI law from 1995 regulating the establishment of representative offices (ROs) of foreign firms doing business in China.
The reform is part of a larger initiative to cut red tape in China and attract greater foreign direct investment (FDI) amid concerns from the foreign business community over the country’s business environment.
The repeal of the law streamlines the setup process for foreign investors establishing ROs in China, and marks another effort by the government to reform administrative processes.
By Srinivas Raman
The recent ruling by a Chinese court in a trademark infringement dispute concerning New Balance’s logo marks a watershed moment in China’s intellectual property rights (IPR) regime.
The court awarded a landmark decision in favor of New Balance (NB) against Chinese competitors deemed to have infringed the company’s IPR, reflecting China’s recent efforts to improve IPR protection.
While foreign firms doing business in China may breathe a sigh of relief at this decision, they must also recognize the implications of the decision against the backdrop of the Chinese trademark regime.