The Shanghai Lawyer
Vol. 1 , No. 09 - July 22, 2002
Shanghai is one of the most dynamic and fastest growing mega-cities in the world. It is quickly establishing itself as the leading financial and economic center of the Far East, on par with the likes of Paris and New York. The Shanghai Lawyer is a bi-weekly publication providing up-to-date newsworthy articles and legal information to professional and business persons around the world. We hope you enjoy the newsletter and welcome your comments and feedback.
Did you know?
Shanghai, plans to add a giant Ferris wheel to its ultra-modern skyline by 2005, unseating the London Eye as the world's largest. The city plans to build a 200-meter-tall (660 foot) Ferris wheel as part of its plans to spruce up its Bund riverfront topping the British wheel by 65 meters (213 feet) and the proposed Las Vegas wheel by 100 ft. (Source: Reuters) |
Letters from Shanghai
Summer has arrived in Shanghai with a vengeance. Temperatures have been hovering around 36 - 38 ° Celsius the past few days with no relief in sight. And as you probably have heard, it is not the heat but the humidity that gets you - frankly speaking as someone who grew up on the Canadian prairies, I can wholeheartedly bear testament to this assertion. Rain is on the horizon however, and should bring welcome relief to the sweltering hothouse Shanghai has become.
Response to this newsletter has been overwhelming and so on a whim we have decided to put a face to Lehman Lee & Xu's Shanghai office. Or at least we will put a face to it once I provide a photo to our techie crew to upload to the newsletter. Letters from Shanghai will be a regular contribution to the newsletter, where I will provide a few short paragraphs about some aspect of living in Shanghai, the latest political intrigue, or offer some other irreverent insight into what is happening in Shanghai today.
As can be seen from the articles in this issue, Shanghai seems bent on becoming a world beater by building the world's biggest this or the world's first that. One cannot help but draw the conclusion however, that the powers that be are still a little insecure about Shanghai status as a truly international city when they have to continually try to outdo everyone else. Still, it won't be too long until the day when Shanghai will just have to sit back and allow its accumulated economic power, cultural opportunities and standard of living speak for the city. When that day arrives, Shanghai will take its place among the other great cities of the world.
Shanghai to build Formula One track
Shifting its ambitions into high gear, Shanghai is planning to build China's first Formula One track by the 2004 racing season. Shanghai's government and state corporations are backing the estimated 3.5 billion RMB (US$400 million) construction costs. The stadium would have 50,000 seats, but could handle up to 250,000 race fans in all. Many believe that an international city like Shanghai must have this kind of world-class sports facility and that it is good way to raise the city's status in the world.
It wasn't immediately clear whether Shanghai would attempt to be included in the Formula One tour. Russia, Turkey, Egypt, Dubai and others have also expressed hopes of landing a Grand Prix race. Details of the plan were released just days after Shanghai, China's high-striving commercial powerhouse, announced it would build the world's largest Ferris wheel (See "Did You Know"), capping a decade of electrifying economic growth and urban reinvention.
Now the city wants to launch itself on one of the world's most elite and expensive sports circuits. The proposed Shanghai track would probably be more than 5 kilometers (3 miles) long with the center also having a 3-kilometer (1-mile) oval for motorcycle racing and other events. Construction work in the city's Jiading district will begin pretty soon and the city government was considering hiring an experienced overseas firm to handle the facility's management. Shanghai is aiming for a world-level operation to join in the competition to host international sports events.
(Source: cnn.com)
Shanghai Essentials
Good news for foreign franchise companies lately, with the Chinese authorities confirming the announcement of soon to be released revised regulations governing commercial franchises. The Ministry of Internal Trade will issue a new set of rules governing commercial franchise operations later this year. The new rules will encourage overseas franchises to set-up in China by strengthening legal protection. On the other hand, local franchise retail owners will be offered protection in the event that the franchise headquarters going bankrupt. Lehman Lee & Xu's Franchise practice group believes the new rules will increase the transparency of operating a franchise business in China and should lead to the influx of even greater numbers of franchise businesses. (Source: China Daily) |
Demand for Notaries Rising
Shanghai's notaries now handle more than 1,400 cases daily, four times more than five years ago, according to the city justice administration. The rise indicates not only the city's booming economy, but also the public's increased legal awareness, said Zheng Changyu, director of the notarization division of the Shanghai Administration of Justice.
He said with increasing exchanges in foreign trade and civil affairs involving foreign matters, businesses and citizens were becoming more aware of having their interests protected by law. In 2001 alone, Shanghai notaries dealt with more than 510,000 such cases, with nearly half involving foreign matters. The majority of cases related to foreign matters concerned studying or working overseas, visiting relatives and traveling overseas, and housing deals with foreigners. Domestic cases mainly dealt with buying apartments via a loan, mortgages, sponsorship, and wills and inheritances. Notaries provide a lawful means to protect the legal rights and interests of citizens, companies and organizations without legal person status.
(Source: Xinhua news agency)
Siemens Switches its Asia-Pacific Headquarters from Hong Kong to Shanghai
Eagerness to strengthen its market position and profitability has pushed Siemens AG to move the Asia-Pacific headquarters of its mobile phone division from Hong Kong to Shanghai. Accompanying the move will be Siemens' adjustment of its strategy in this region, where China has been defined by the company as the "key focus'' for the coming years in both sales as well as research and development. Siemens view the move as a consolidation of their regional functions, including marketing, logistics and other regional operations. Bolstered by its cell phone manufacturing plant in Shanghai, the consolidation is expected to streamline the division's Asia-Pacific operations in order to meet dynamic market challenges. Statistics from the Ministry of Information Industry reveal the number of mobile phone users in China reached 170 million by the end of May 2002, which further strengthens its position as the world's biggest mobile-telecom market.
The huge market potential has lured overseas and domestic handset manufacturers to accelerate efforts to secure their respective niche in the market. Siemens' aim is to secure a double-digit mobile phone market share within the Asia-Pacific region, while maintaining sustainable profitability. The China market is their primary focus for the years to come. To achieve these objectives, Siemens will intensify its marketing endeavors to introduce more products specially tailored for Asian users, such as its latest 8008 series which debuted at the recent CommunicAsia 2002 trade show in Singapore. This will be done in accordance with users unique lifestyles and develop local applications for users in the region.
While considering the development and manufacture of flip-top handsets in China, Siemens will transfer the focus of its voice-centric product research and development (R&D) to Beijing to better cater to the Asia-Pacific market. Earlier, Siemens announced that it will invest another US$60 million in its Shanghai plant, whose annual output is expected to grow from 10 million units to 14 million this year. With a roughly 14 per cent market share, Siemens reportedly ranks third on the domestic market after Nokia and Motorola, though these top three handset giants have begun to feel the growing pressure due to more fierce market competition from other overseas rivals like Samsung and domestic companies like TCL and Bird.
(Source: China Daily)
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Green Cards Issued at Rapid Rate
Shanghai has issued "green cards" to more than 240 overseas residents since it started the initiative to attract overseas investors and talent half a month ago. About 90 percent of the "green card" holders are returned Chinese students, many with U.S. green cards. The rest are foreign nationals and Chinese from Taiwan and Hong Kong, according to the city's personnel administration.
The "green card", or permanent residence permit, allows the holder to engage in scientific research activities, start a business and send his/her children to school under the same conditions as local children, while enjoying preferential taxation treatment. Shanghai regards the new residence permit system as a breakthrough in the city's bid to attract domestic and overseas talent. This residence permit system in Shanghai is the first of its kind in China. The new changes to residence laws have sparked great interest in many Western countries.
(Source: Xinhua News Agency)
First-half-year GDP Growth Estimated at Impressive 7.5%
Prompted by better-than-expected foreign trade development and larger government expenditure on infrastructure, China's gross domestic product (GDP) growth will maintain its strong upward momentum with a rate of 7.5 per cent during the first six months of the year. China is on track to realize its set economic goals and this year's GDP growth rate could even be higher than that of last year.
China's GDP growth was 7.3 per cent last year. It might be 7 to 8 per cent this year. China's foreign trade has registered a positive performance in the first half of the year, thus suggesting overall economic growth will exceed 7 per cent. The sizzling global economic recovery has come earlier than expected, which, in turn, has created a sound external environment for China's economic development.
Total import and export volume is expected to rise by 12 per cent, while exports may increase 13 per cent in this period. Furthermore, foreign direct investment (FDI), according to NBS statistics, grew by 12.4 per cent to hit US$16.9 billion in the first five months of the year. Based on the performance of China's foreign trade and FDI in the first half of the year, the country's external commerce will keep robust growth in the following months.
China plans to issue 150 billion RMB (US$18.1 billion) worth of treasury bonds this year, and this huge State expenditure will be used in a number of large infrastructure projects to boost the domestic market. Investment in fixed assets witnessed an accelerated swell in the first half of the year, which is likely to increase by 25 per cent compared with the same period last year. Industry also expanded rapidly - in the first six months of the year, the added value created by large State-owned enterprises and non-State firms is expected to rise 11 per cent compared with the same period last year.
Domestic consumption, which has become a growth engine for China's economic development in recent years, was also considered to be a major driving force for the GDP growth in the first half of the year. While the domestic market of consumer goods saw slightly slower growth, the total retail sales of consumer goods rose by 8.6 per cent in the first six months. Additionally, China's large population of 1.3 billion has impeded the swift and thorough implementation of the country's economic reforms, but it has guaranteed a huge domestic market with vast potential for development.
The past several years have indicated that at least a 10 per cent industry growth rate will very likely guarantee the GDP to hit 7 per cent. Moreover, policy stability will ensure China's economic growth this year. The Communist Party of China will summon its 16th national congress this autumn and most believe that economic development will be further addressed at the meeting, and this positive expectation will help stimulate the country's business activities.
(Source: english.peopledaily.com.cn)
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China's Tourism to Further Open to Private and Foreign Funds
Non-state-owned capital will be further permitted to enter into China's tourism industry. China's tourism industry has withstood the test of economic depression and "9.11" terrorist attacks in 2001. Latest statistics from China National Tourism Administration indicate that tourism earnings last year reached 499.5 billion yuan (US$ 60.18 billion), 10.5 percent more than last year. The revenue included a forex amount of 17.8 billion U.S. dollars from overseas tourists and 352.2 billion yuan (US$ 42.5 billion) from homebound tourism.
As the country known to have the richest tourism resources of the world, China should place great emphasis on its tourism. And to make China a primary destination of world tourism it must further loosen up limitations on use of private and foreign capital and make these accessible to developing its tourism.
(Source: english.people.com.cn)
Shanghai Plans Asia's Biggest Shopping Center
The Shanghai Ganghong Industrial Co. plans to build Asia's biggest shopping center in Shanghai, China's leading business and industrial center. The shopping center will feature general merchandise, cultural and art products, food and drinks, furniture, products for home decoration, and exercise equipment. A spokesman for the company said the cost of the first phase of the shopping center project is estimated at 1.5 billion yuan (nearly 200 million U.S. dollars).
With a planned floor space of 330,000 square meters, the shopping center will be located in the Jinhongqiao Resident District in the Hongqiao Development Zone. There will be about 130 lifts inside the center, including some for sight-seeing. The planned parking lot will be spacious enough for up to 3,500 cars to park. A hotel and an office building will be built during the second phase of the development.
(Source: People's Daily)
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