LEHMANLAW.COM

South China Lawyer

Vol. 1 , No. 1 - May 9, 2003

TOPICS THIS ISSUE:

  • Nike Wins Trademark Infringement Case in Shenzhen
  • Calls for Constitutional Amendment
  • ID to be sufficient for Chinese Travelers
  • Guangdong Court to Decide Fate of Derelict Panamanian-Registered Ship
  • Experts to Boost Legislative Powers
  • Deputies Push for New Satellite Launch Center on Hainan Island
Welcome to South China Lawyer

Welcome to the inaugural issue of Lehman, Lee & Xu's South China Lawyer Newsletter.

Lehman, Lee & Xu has recently opened an office in Shenzhen, Southern China. In an effort to keep our clients and community at large informed of happenings that may be of interest to them or affect their business dealings in this region of the world, we will be publishing the South China Lawyer on a bi-weekly basis. In this inaugural issue, we would like to highlight the city of Shenzhen, as it is our regional headquarters. In upcoming issues, we will focus on other locations and opportunities in South China.

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As many of you already know, Shenzhen is a Special Economic Zone (SEZ) and borders the Hong Kong (SAR). Officially formed in 1980, the city of Shenzhen is a provincial city in Guangdong Province. During the 1980s, Shenzhen and 16 other major cities were granted the status of deputy provincial or provincial level cities with economic management power equal to that of a province. The municipal government of Shenzhen currently administers six districts. They include Futian, Luohu, Nanshan, Bao'an, Longgang and Yantian. The government offices are located in the central district of Futian.

The city of Shenzhen is divided into two parts: SEZs and non-SEZ areas. Theoretically speaking, the non-SEZ areas cannot adopt preferential policies specifically granted to the SEZs. In practice, however, there is little difference between the two districts. All special policies granted to the SEZs are now applicable to other parts of Shenzhen.

Economic development in Shenzhen has been phenomenal. From 1980, when the SEZ was established, to 1999, the GDP of Shenzhen grew 731.2 times, investment in fixed assets increased 959.2 times and actual foreign investment grew 179.19 times.

Unfortunately, not only Shenzhen but also the entire region and many parts of the world have had to live with and adapt to the uncertainty brought about the Sever Acute Respiratory Syndrome (SARS) in recent times. After the initial shock and concern due to the virus and the deaths caused by it, life in Shenzhen and many parts of the region is slowly getting back to normal and it is business as usual.

With our facemasks on, we begin the next chapter in the rapid development of this region of the world.

Nike Wins Trademark Infringement Case in Shenzhen

Suspecting a Spanish and Chinese company of trademark infringement, Nike launched a lawsuit against them in a Shenzhen court and won the case.

The Shenzhen's Intermediate People's Court heard that the Spanish company had arranged with a garment factory in Jiaxing, Zhejiang Province to make ski jackets labeled Nike. The factory appointed a trading company in Zhejiang as its custom broker to export the jackets through Shenzhen Customs.

The defendants where held to have infringed Nike's exclusive registered trademark without obtaining its prior permission.

The court ordered the defendants to cease all activities in contravention of Nike's trademark rights and the destruction of all labels and products baring Nike's trademark effective immediately.

(Source: SinoCast China Business Daily News)

Calls for Constitutional Amendment

A group of 30 legislators from Guangdong, China's booming southeastern coastal province, called for a constitutional amendment making private property "sacrosanct and inviolable." Other legislators called for special laws to protect and encourage private business during the 10th People's Congress recently held in Beijing.

In a sign of the times, several groups of pro-business representatives including the national chamber of private businesses addressed and warned the legislature that the lack of secure property rights was forcing investors to send money abroad. The congress should, it said, "make it clear that property is a citizen's basic right and give state protection to citizens' legitimate private property rights".

However, government officials have made it clear that there will be no such amendment during the session this year. Nevertheless, several of the business representatives attending said they expected that an amendment would be passed in the next couple of years.

According to a senior government official, there are 133 owners of private enterprise in the congress from a total of nearly 3,000 representatives. While the number of private enterprise owners equates to less than 5% of the total number of representatives, it is nearly three times the number in the last congress.

One representative at the Congress, Su Zengfu, 62, is the founder and chairman of Supor, a company with 3,800 employees that sold US$120 million of pots and rice cookers last year. "America is strong because its private corporations are strong," Su said, "and China is inevitably headed in the same direction."

(Source: The New York Times)

ID to be sufficient for Chinese Travelers

South China's Guangdong Province is expected to see its residents commute to Hong Kong taking with them only their identification (ID) cards.

According to sources, Hong Kong SAR Chief Executive Tung Chee-hwa informed Guangdong Provincial Governor Huang Huahua last month that the central government is going to allow Guangdong permanent residents to enter Hong Kong as individual tourists.

Previously, Hong Kong only accepted group travelers from the mainland. "The Guangdong Public Security and Frontier Defense Bureau has not received formal documents from higher authorities indicating when local Guangdong residents will be able to travel freely to Hong Kong holding only their ID cards," said Lu Min, director of the publicity department under the bureau.

"As far as I know, the issue is still being discussed," said Lu.

According to Lu, the government is working to simplify the procedures for mainlanders to go to Hong Kong.

Due to the narrowing economic gap between the Chinese mainland and Hong Kong and strict inspection by frontier defense authorities, the number of illegal emigrants to Hong Kong has been shrinking in recent years, making less-restricted travel a consideration. However, "it is hard to predict if illegal emigration to Hong Kong will be eliminated in a would-be simplified exit-entry policy," Lu said.

"So far, there is no exact deadline on when the first mainland native from Guangdong will be allowed to travel to Hong Kong with only his ID card," said Ye, an official with provincial tourism authorities, who refused to be fully named.

According to Mr. Ye, last year a total of 1.2 million Guangdong residents visited Hong Kong with organized tour groups.

(Source: China Daily)

Guangdong Court to Decide Fate of Derelict Panamanian-Registered Ship

A derelict Panamanian-registered ship long anchored in Chaozhou harbor in South China's Guangdong province will be judged abandoned if no one claims the vessel before a deadline set by a local marine tribunal. The ship, the "Richmax", has been anchored in the harbor's navigable waters after entering Chaozhou harbor in August 2001 from Hong Kong, and poses a serious threat to shipping during the typhoon season, according to various sources.

The Chaozhou Maritime Administration has failed to find the owner of the "Richmax" despite an ongoing search and investigation, and so far nobody has shown up to claim it. The Shantou City tribunal under the auspices of the Guangzhou Maritime Court has accepted an application by the Chaozhou Maritime Administration to handle the case. According to Chinese maritime law, the ship will become public property if no one claims it.

(Source: Xinhua News Service)

Experts to Boost Legislative Powers

According to Standing Committee of the National People's Congress (NPC) spokesman, Jiang Enzhu, there is little likelihood of further political reforms in Shenzhen as mentioned in some media reports.

Jiang dismissed foreign media reports that the city planned to adopt a Western-style separation of its judicial, legislative and executive powers. He said Shenzhen, along with several other cities which he did not name, was working on a plan to reform its government structure to make it more accountable and transparent. However, the plan did not include reforming the city's judicial or legislative systems.

"The purpose is to explore a public administrative management system that is compatible with the socialist market economy that is currently under construction in China," Jiang said.

(Source: South China Morning Post)

Deputies Push for New Satellite Launch Center on Hainan Island

Building a satellite launch centre in China's southern island of Hainan is "just a matter of time," given the huge commercial benefits it will deliver, according to lawmakers and space authorities in Beijing.

Liu Qi, a deputy to the National People's Congress (NPC), said legislators from Hainan Island are actively backing the project, which it is claimed will slash the present cost of launching a satellite and help the island's economy.

"We have extensively studied the feasibility of such a project - including locating a launching site and researching its geological and meteorological conditions," said Liu, who is also vice-governor of Hainan.

Earth-synchronous satellites that are launched from a centre closer to the equator have a reduce launch cost compared with those launched from a site at higher latitudes. And they enjoy a longer shelf life, said Sun Jiadong, a veteran Chinese space expert.

China's three existing launch sites are located in the western and northern landlocked regions of Jiuquan, Xichang and Taiyuan. However, Hainan Island has the lowest latitude and is nearest to the equator - two desirable factors that contribute to efficient launches, according to Sun.

Long Lehao, chief designer at the China Academy of Launch Vehicle Technology, said Hainan's latitude could help increase the capability of rockets by up to 7.4% from that of Southwest China's Xichang site or up to 18.5% from Jiuquan in Northwest China.

Long said Hainan had the added advantage of being able to use sea transport.

The lower cost and high efficiency to be provided by a new launch site will be able to satisfy China's domestic needs as China plans to send a constellation of satellites to serve its national economy and enable it to better compete in the global commercial launch market, both Sun and Zhang said.

Apart from advantages in sending up earth-synchronous satellites, having a launch centre in Hainan is also a big safety plus, Zhang said. For example, when launching a satellite from Hainan over the South China Sea, people will no longer have to worry about space debris hitting land.

(Source: China Daily)


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