When our employer clients seek our counsel on new China employee hires, we usually (but not always) advise they use an initial fixed term of three years. We also recommend that before the initial employment term is up, they consider whether to extend the employee’s contract for a second employment term.
Contract manufacturing is fundamentally the purchase of a product. For any product purchase, the key terms are price, quantity and delivery date. And yet many buyers treat these key term as secondary issues. As buyers focus on exciting issues like product design and "getting to market", buyers frequently fall into a trap. They assume that price, quantity and delivery terms will never be an issue. When these issues arise, as they virtually always do, the product buyer is in a situation where it has little to no room to negotiate. The overseas factory is now in control, and then it springs the price trap.
Omicron is incredibly contagious and China is not well-equipped to slow it down to the same extent it has done with previous COVID variants. Omicron will likely lead to shutdowns of China's factories and convince more foreign product buying companies to diversify out of China.
China's online gaming market is the largest in the world in terms of revenue, but its online gaming laws, market access restrictions, and censorship make it difficult for non-Chinese developers to sell their online games into China. This post sets out the basics on what it takes for foreign companies to get their online games into China.
At the end of each calendar year, many nonprofit organizations, including nonprofits in China, start to appear more frequently on everyone’s radar. Recently I counseled a nonprofit organization that wanted to set up China operations in some way. Technically they are a U.S. not-for-profit (501(c)(6)) organization, rather than a 501(c)(3) charitable nonprofit, but I use
My goal with this talk was never to explain the laws in various countries so that they could handle all of their clients' foreign legal matters. More than anything, my goal was to get the lawyers in the audience to (with apologies to Apple and to grammarians everywhere) think different. I wanted to get the lawyers in the room (and I mean this literally, these talks being pre-COVID) uncomfortable about representing companies on foreign legal matters. I wanted their discomfort to get them not to lazily assume things.
There is no one size fits all solution for China dispute resolution clauses because they depend on so many factors, including, the location of the Chinese company within China, the nature of the transaction, the goals of the parties, the most likely dispute issues, the most important dispute issues, the type of dispute issues, the languages of the documents and potential witnesses, the law of the contract, and a whole host of other issues.
It should go without saying that international product manufacturing costs are key for nearly all companies that manufacture in or secure their products from a foreign country. Most companies that manufacture in China would love to move their manufacturing out of China. But doing so is difficult for nearly all, and impossible for many. Product manufacturing costs are a huge factor in choosing a location for product manufacturing or outsourcing. Over the last year, I have had probably more conversations about where companies should manufacture their products than in the prior five years combined. And those conversations have reminded me that many companies have too narrow a definition of product costs.
Chinese businesses typically want a simple, specific, concrete proposal to which they can respond. If the foreign side leaves the structure vague, the Chinese side will usually have nothing to say. In this situation, a deal that may be good for both sides never gets done because neither side can bring it to the point where the real bargain is negotiated. The Chinese side virtually always wants to show its cards last. If you do not show your cards first, there will be no cards back from the Chinese side.
How to Lock in Product Prices with Overseas Manufacturers to avoid NOT getting your products when you need them most. The three key issues in nearly all the contract manufacturing agreements we draft (be they for China, Vietnam, Pakistan, Mexico, Thailand, Malaysia, Indonesia or wherever) are 1) price, 2) quantity and 3) delivery date. Yet many product buyers that have their products manufactured overseas focus so much on issues like intellectual property protection and control of molds, that they neglect these three key issues.
