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[rant] I have first hand experience with this. In China there is a law which states that in certain sectors and above a certain level of "security" (guess who d
by TXV 10y ago
[rant]
I have first hand experience with this. In China there is a law which states that in certain sectors and above a certain level of "security" (guess who defines security) the supplier company must be Chinese and its legal representative must be a Chinese national.
Of course this law is loosely enforced. It's not that they prevent you from doing business there. Simply it's like a gun pointed to your head. When they decide it's time to pull the trigger, you're out. You might think to buy a Chinese company or set up a commercial partnership or found a JV and then sell your products through them. One successful example of this is Blizzard. However this works up to a point- the "security" level. When you're above the line, even the product must be Chinese, and that's when you transfer your sources to the local counterpart or give up and leave.
Concretely, this means that you can forget doing business with the Chinese gov. Or prepare to be canned up any time.
Now couple this with the wild investments China is conducting on a cash-hungry Europe. And of course it is state-driven, because outbound capital flows are heavily restricted in China otherwise.
However it looks like Chinese acquisitions in EU not only play toward China's long-term goals to rebrand their production (and eventually make money off of our own market). You can also see it as a modern cold-war with the USA, where the stake is industrial predominance and the means is influence over Europe. Just like the old USA vs USSR times. The USA try to make deals with us, while the Chinese outright buy us.
Europe has mainly two choices, take a side or become the third pole. I think bot are politically valid choices, however what is really astonishing and enraging, and the article conveys it very well, is that EU has the political energy to do neither.
It's not that our political agenda gets crushed by either side. Is that we have none. And this to me means that the European Union at the end of the story will be the only one true big loser, and we as Europeans will follow along.
[/rant]
- zhte415 10y agoFor those interested in more about the legal representative /'fa ren' (literally, legal person) there's a good overview here: http://www.china-briefing.com/news/2011/08/11/roles-and-responsibilities-of-the-china-legal-representative.html http://www.china-briefing.com/news/2011/08/11/roles-and-resp... TXV: Not a law about the role of legal representative in general, right, but that industries that are defined as 'protected' are not open to foreign owned companies? The role of the legal representative is to represent the company in civil law. The legal representative also has a supervisor or board of supervisors, so their actions can be kept in check. This in indeed one of the main roles of the supervisor/board of supervisors: to make sure the legal representative does not run away with the company's cash.
- TXV 10y agoCorrect, it's not about the role of the legal representative. I agree that the terminology is not very clear, as customary of Chinese laws. It states that the physical person or the legal entity investing in the company must be Chinese, where the term you cited /'fa ren' 法人 refers to the legal entity (e.g. a company) and the legal representative I cited is the physical person investing in the company (the president or the owner, which if I'm not mistaken is the same guy who represents the company before the law). Terminology aside, it goes even further. It even states that 工作人员仅限于中国公民 the workers of that company must be Chinese nationals!