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Chinese Law Is Not An Ass, At Least For Western Companies.

By Dan Harris and Steve Dickinson

The Off The Record Blog (a really good blog, BTW) just did a short, sweet, blunt post on the law in China that is only half right. The post is entitled, the "The Law is an ass and there you have it." It consists of the following quote from "a prominent Chinese lawyer during a private discussion about China?s new Labor Law":

?The problem with Western companies in China is that you think laws are about compliance; Chinese companies realise they are just obstacles to be avoided.?

In fact, that is only half the problem. The problem is that BOTH the Chinese lawyer and the Western companies are acting rationally and correctly. The Western company has to comply because it will be an easy target if it does not. The Chinese company, on the other hand, can game the system and probably do just fine. There is also a flip side to this. I had lunch earlier this week with co-blogger Steve Dickinson and Ben Dietz, who just this week joined my firm and who handles US side legal work for Chinese companies. We discussed how difficult it is representing Chinese clients in the United States because they tend to spend so much time and effort seeking to avoid clear laws even when following the laws would be relatively painless and far less risky. Looking on the bright side (at least for us lawyers), China is very slowly becoming more legalistic and I see the new labor law as a prime sign of that. That law probably comes closer than any other law in China in terms of having an equal impact on foreign and Chinese companies because much of its enforcement will come from disgruntled employees and ex-employees, as opposed to from the government.

Full post as published by China Law Blog on March 28, 2008 (boomark / email).