China Esquire

Well, last week I posted “ sanlu + government help = no lawsuits?” where I discussed the policy of the Chinese government to offer help in lieu of allowing Sanlu and other entities to suffer through lawsuits, the lack of damages and use of civil litigation, and other such thoughts.  And of course, lawyers looked very good because they were helping their people enforce their rights at hospitals and other places.

Turns out that this rosy picture isn’t so rosy after all: enter the Chinese government’s “encouragement” to lawyers to stop taking on these cases.  (a.k.a. government pressure)  Reuters published this article entitled “ China milk victim lawyers say pressed to quit” ( h/t CDT) yesterday:

Chinese lawyers seeking redress for infant victims of toxic milk say they are facing growing official pressure to abandon the efforts, blaming growing government sensitivity over the health scandal.

[L]ocal rights advocates and lawyers have mobilized to support families seeking redress, possibly by suing dairies or officials who failed to disclose the problem.

But on Sunday, organizers of the campaign and some of the lawyers said officials in some provinces have pressured volunteers or their bosses to give up the campaign.

“About two dozen of the lawyers have called these past days to say they want to quit the volunteer advice group,” said Li Fangping, a Beijing lawyer who helped organize the group soon after public news of the poisonings emerged.

“Some of them said that they or their offices were told they’d face serious repercussions if they stayed involved.”

Frankly, I am not all that surprised.  I was hoping that the government would continue to work with lawyers to ensure public safety and allow the victims to receive important treatment.  I was also hoping that the government would see cooperation with lawyers are promoting a peaceful society.  But alas, the government, as always, has decided to cast lawyers as troublemakers…  and harmful to a harmonious society.  I think its a bad policy choice as usual.

It’s not like the lawyers were instigating civil lawsuits or anything–they were merely allowing victims access to government sponsored treatment for free.  I wonder if the government appreciates any group that would portend to be a rival to itself in terms of being helpful to the public…

But the rash of warnings suggests the government does not want lingering political and legal fallout from the milk scandal.

“I’d guess they see this issue as just too sensitive for lawyers and court cases,” said Zhou Shifeng, a volunteer lawyer from Beijing who said he had heard of the pressure.

“When the interests involved are too powerful, they will devise ways to get lawyers to quit, not necessarily direct orders.”

Many hundreds of parents have called the volunteers to ask about compensation, and possibly suing Sanlu Group, the north Chinese dairy whose milk powder has been blamed for many of the illnesses, said Li.

Lawyers in Beijing said law officials there had nudged them to be “aware of the general picture” and to heed and have trust in the government’s handling of the scandal.

But in other parts of the country where many children are sick, apparently from milk powder, the advocates received tougher warnings, some said.

“The local judicial authorities just don’t want any of us to take part,” said Chang Boyang, a lawyer from central China’s Henan province who helped organize the group. “The pressure on law offices was too heavy. We had to compromise.”

While it may be the case that many asked about suing Sanlu, there were no indications that any lawyer was actually about to do the dirty deed. In fact, it seemed like most lawyers were already hesitant to do so.  So why in the world is the government stepping in to ensure that it won’t happen?  My feeling was that the government was already acting like a safety valve on public pressure.  Now its just attempting to make its feelings known in a way that is plainly ridiculous.

I think what the government is afraid of is that the true general picture will come out of this scandal: lax, lazy, and/or corrupt administrators; a government that looks terribly slow and lame in light of the fact that this was known for months; more PR touting just how bad China product quality has become.  But you know what?  It’s already happened.  The cat is out of the bag.  And no matter how hard the government tries, you cannot unring the bell.  It’s done.

If the Chinese government continues to believe that this sort of thing is too sensitive for the courts and the judicial system, then what good is the judicial system anyways?  Other than as an appendix to the Party?  Zip.  Zilch.  Nada.  And that’s the problem in my mind.  If the government got over its need to save face 110% of the time, I think rule of law would actually help the country as a whole…  and also help the government get to work on actually running the country, and not worrying 110% of what the rest of the world thinks about it.  It’s rather counterproductive.

Just had to vent a little since I see my fellow lawyers being slightly oppressed.

UPDATE: Looks like CNN got in the act with a video about this story too.

I should have posted this one earlier, like some other interesting conferences/symposiums that are happening around here.  Anyways, the ACSL is having their annual meeting from 10/2/08 – 10/4/08 at my alma mater, UC Hastings College of the Law.  (198 McAllister St., San Francisco, CA 94102 USA)  The title of this year’s meeting is “The West and the Rest in Comparative Law”.

This conference aims at unveiling the “master narrative” of the Western Legal Tradition as reflected in the comparative study of law. In particular, we will explore how we perceive ourselves in relation to “the other”, i.e. what once was known as the radically different legal cultures. Very often our description of the other is deeply revealing of our own “self portraits”, something that we need to better understand. To be sure, in order to properly compare, we should get rid of as many stereotypes as possible both about our own Western identity and about that of the rest. Only by doing so may we avoid comparing actual legal entities with imaginary ones.

The program is here.  It looks interesting enough from a theoretical perspective, so those who are into comparative law might want to attend this one.

More information can be found here.  And registration is here.

I knew I would see a story about the legal ramifications about the Sanlu milk formula scandal sooner or later.  The Christian Science Monitor finally wrote up an interesting article today entitled “ What China’s tainted milk may not bring: lawsuits.“  ( h/t to CDT)  Of course, part of me didn’t like the title already since most everyone knows that I am pro-litigation and pro-lawsuit as an effective means of enforcement by private parties.  (At least, that’s true in America)

But I find the article interesting:

Li Fangping, a prominent human rights lawyer, is busy organizing victims of the poisoned infant formula scandal rocking China and offering pro bono help. But he is not planning to sue Sanlu, the formula manufacturer – not yet.

A case that in the United States would attract swarms of lawyers eyeing the prospect of millions of dollars in damages is primarily a political, not legal, issue in China.

For reasons to do with China’s still-developing law and its authoritarian political system, lawyers are treading carefully around the Sanlu incident, in which four babies have died and nearly 53,000 suffered kidney problems after drinking adulterated powdered milk.

Well, I am sure that part of it also has to do with the fact that lawyers who get on the bad side of the government don’t end up doing too well.  Imprisonment and harassment by the government come to mind.  In America, you may get death threats, but very rarely will anyone actually act on it.  And of course, you even more rarely have the U.S. government breathing down your neck.

That being said, I have to admire Mr. Li for organizing people and then offering to help them out without cost.  Pro bono work is an admirable thing, and for him and other lawyers to offer it in China is truly a good and decent thing to do.

The government is seeking to forestall legal repercussions by pledging free medical care for all babies affected by the tainted milk. Mr. Li is holding his fire until he sees how fully that pledge is kept.

“We are still waiting to see how the government’s compensation policy works,” he says. “If consumers accept it there will be no need for a lawsuit” against Sanlu.

Instead, Li and more than 70 other lawyers offering their help gratis are concentrating on cases where hospitals are not abiding by the Health Ministry’s public promise that treatment will be free. They are advising the parents of victims about the practicalities of claiming compensation from the government for the expenses they incur in treating their babies.

This is a very interesting thought here.  Why have lawsuits when you can have the government step in and make sure that plaintiffs are made whole?  (okay, it’s arguable that the plaintiffs aren’t made whole because they aren’t compensated for pain and suffering, but I don’t want to go there in this part of my post)

People in America have been clamoring for “tort reform” for years.  I get these obnoxious emails from David Lovett about the need to cap medical malpractice awards and “protect” physicians.  That’s such a crock.  (licensed physicians who are repeat offenders just shouldn’t be allowed to practice without supervision or other restrictions…  and if someone is dumb enough to insure them, then they have to pay.  Period.)  But is capping damages the most just thing to do?  I don’t think so.  So here’s a thought for President Bush (and I don’t agree with his assessment): if you want to have true tort reform, then perhaps the government should foot the bill wherever possible.  Interesting thought in my mind.

I don’t think the Chinese government’s method of compensation is all that fair in terms of pain and suffering (and time and nuisance value) by just paying all treatment fees.  But it is great in terms of promoting social stability and trying to quell the unrest.  What’s the downside?  Ultimately, such an action likely will encourage would-be offenders to continue to market garbage products.  And of course, true justice isn’t really served.  The government ends up shielding the companies at the cost of damaged parties.

The central government has promised to pay all the medical costs arising from the scandal, the extent of which is still being discovered: On Sunday a Hong Kong hospital reported the first case outside mainland China of a child found with kidney stones after drinking tainted milk.

“If their children recover, and the government has paid for their healthcare, how can they sue Sanlu?” asks Liu Renwen, a legal scholar at the China Academy of Social Sciences. “I don’t think many will try.”

I think its quite easy actually.  But until lawyers are willing to do it, it won’t happen.  Perhaps thats why the Chinese government knows that lawyers can be agents of reform/change if they don’t work with them…

The 1986 principles of Chinese tort law do not allow citizens to claim damages for moral or spiritual suffering – what US lawyers call “pain and suffering” – only material damages to compensate for medical bills, for example.

That is changing, however, and Chinese courts are increasingly granting moral damages. Four years ago two families from the province of Anhui won damages from another infant formula manufacturer whose substandard milk powder was blamed for their babies’ malnutrition.

“Damages are so low in China that companies can get away with it,” says Dan Harris, partner in the Seattle law firm HarrisMoure, which specializes in Chinese business law. “Why bother to recall if only 20 people are going to sue you and win $20,000 each?”

I agree with Dan here, and I continue to believe that Chinese courts need to start allowing greater damages.  It is more just.  And it will encourage the use of the legal system.  The downside to that?  It allows for less social “harmony” if you open up the courts for everyone to use freely.  (and yes, there will also be freeloaders, that’s always a downside)  I’ve talked about damages before and don’t think I need to elaborate too much… it’s pretty intuitive.

Li, as he contemplates the possibility of a lawsuit against Sanlu, says that because “this case has become politicized, it is unclear whether it can be resolved through a legal process.

“The government is trying to ensure social stability, and they do not want to see all the victims’ parents to gather together, so they probably will not allow a class action suit,” he expects.

“Individuals should be able to sue companies,” Li argues, but in the interest of social stability “the government just takes money out of the national budget” to compensate victims of scandals such as the Sanlu incident.

That’s exactly the problem.  Lawsuits are supposed to be the arena to address disputes without being political.  (At least, they are in America, though there is room for debate when an issue is extremely political)  China’s courts aren’t capable of doing that it seems.  But that’s the goal China should shoot for: unbiased courts where things are done by the rule of law, and not rule of party.

Another consideration is this: what is the cost of social stability?  I argue that it’s going to be the health and safety of your constituents because Sanlu isn’t an isolated incident.  It will happen again.  And again the government will step in to remedy the situation.  To me, that’s not ideal.

But, I must admit, it does seem like a working solution in the short run…

Really interesting article from Time today entitled “ Why China Won’t Come to the Rescue” that discusses why China isn’t about to invest to save battered American financial institutions.  I think the reason can be summed in 2 ways:

1. Been There, Done That…
2. I’m Not Falling For That One Again…

Basically, China is not about to play the fool twice and throw its money away.  Here’s the article:

If “once burned, twice shy” isn’t an old Chinese proverb, it probably should be. As Gao Xiqing, the chief investment officer of China’s $200 billion sovereign wealth fund, meets in New York City this week with Morgan Stanley CEO John Mack to discuss increasing the Chinese government’s stake in the venerable — and flailing — investment bank, he bears an obvious burden. Last December, the CIC (the China Investment Corp.) invested $5 billion for a 9.9% stake in Morgan Stanley. On paper, that investment is now down more than 25%. Worse, Beijing paid $3 billion for a piece of the Blackstone Group just ahead of the private-equity firm’s initial public offering last June — an investment that occurred about a nanosecond before the so-called subprime crisis began annihilating value on Wall Street and beyond. Fairly or not, the Blackstone stake has since become the symbol in China of a naive bunch of foreigners getting hooped by Wall Street sharpies. It’s been the subject of withering public scorn in China and has drawn pointed private criticism from the highest levels of the Communist Party, banking sources in Beijing and Hong Kong have said. The message: Never again.

Well, not entirely.  Read on:

The answer, if the recent behavior of other sovereign wealth funds and foreign private equity houses is any indication, may be to deliver, in person, a simple message: No. Not again. Not unless you structure a deal in such a way that we simply cannot lose. Otherwise, goodbye. That, in effect, is what Sameer Al Ansari, the CEO of Dubai International Capital, told Wall Street earlier this summer.  “There are a lot of other compelling places to look for investments these days,” he said.

To the extent that sovereign wealth funds are talking to desperate-for-capital bankers in the U.S. — and, as Gao’s trip shows, they are talking — the terms of the discussions, one senior Hong Kong–based banker said today, are likely to be very harsh for any potential recipient of capital: “You’re basically looking at structuring a deal at this point in which there is no downside — none. Even if a company goes under, like Lehman, you’re first in line to get paid a return on your assets. Take it or leave it.”

Now this should prove interesting from a lawyer’s perspective.  Why?  Because as an American lawyer, I can think of almost no good reason why you should structure a deal so one-sided if you still have any duty of loyalty to your client.  Obviously avoiding catastrophy is probably a good reason.  But I can also imagine that in good times, that attorney’s tail is on the line for borderline malpractice…  or at least, if not malpractice, I wouldn’t be returning as a client.  That’s a very tough line to tread.  And not many lawyers are quick to write up such agreements for their clients where they lose big time.

Of course, clients are stubborn and will force their lawyers to do crazy things at times.  I think money, the bottom line, and the power of economics may have something to do with this.  But as an attorney, it’s not fun being in that position.

From a business perspective, it’s almost ironic that Wall Street–the proverbial powerhouse of international financial markets–may be getting taken to school by Sovereign Wealth Funds.  But then again, SWF’s have something that Wall Street desperately seems to need–cold hard cash.  But given the current environment, you gotta do what you gotta do.

And there’s a bit more:

Now, moreover, even if valuations in the U.S. financial sector get more appealing should the market rout intensify, there’s another factor in play: governments in East Asia and the Gulf want their funds to help domestic companies, not foreigners. On Thursday, for example, Beijing’s CIC announced it would make investments in three of China’s biggest commercial banks — Industrial and Commercial Bank of China, Bank of China and China Construction Bank — that themselves are getting hurt by an economic slowdown and a real estate slump at home. “This is a significant policy initiative aimed at supporting China’s leading financial institutions at a time of global turmoil,” says Jing Ulrich, chairman of China securities at JPMorgan in Hong Kong. It’s another way of saying to CIC’s Gao Xiqing, If you come home from New York having increased our stake in Morgan Stanley, it had better be the sweetest deal anyone in Beijing has ever seen.

I just couldn’t resist throwing this part in.  Nationalism, yes.  But a necessary nationalism?  Yes.  China isn’t stupid.  Why throw away your money in America when you can throw it away in China?  And helping your own country’s economy?  It’s a no brainer.  (not like my post on Coke and Huiyuan, that is a different shade of nationalism)

What’s this have to do with the American side?  Its what the end of the article is: American financial institutions must make these deals really sweet for the SWFs like CIC.  Or they aren’t getting any of the money.  Sounds like a terrible dilemma to be in really.  But that’s business.

Seems like Coca-Cola isn’t all the rage in China with the Huiyuan deal.  This has been receiving little coverage on the blogs–I think only Stan Abrams has covered this more than once.  (see his main post here)  But I read this AFP article entitled “ Chinese firms try to block Coke’s juice company takeover: report” and had to at least post it:

A group of Chinese drinks makers are to submit plans to the government they hope will block Coca-Cola’s takeover of China Huiyuan Juice Group, state media reported Monday.

A consortium has prepared three plans and handed them to the Ministry of Commerce to keep the Huiyuan brand in Chinese hands, the Beijing Morning Post reported, citing an unidentified official at one of the companies.

The ministry says it will review the proposed 2.4 billion-dollar friendly takeover of the Hong Kong-listed company, according to the principles of a market-oriented economy.

No it won’t.  Let’s be honest: market oriented economy happened already when Huiyuan decided to sell out to Coke.  That’s the market at work.  This isn’t.  This is about government protectionism and meddling.  (not that the U.S. doesn’t do this either, so don’t get me wrong)  I just want to clarify that this is a smokescreen if I’ve ever heard one.

The consortium’s proposals include breaking up Huiyuan and selling it to different Chinese firms or purchasing it with a yuan-denominated fund set up by domestic companies, the newspaper reported.

Another proposal would see the government giving the green light to the merger but retain the name and then sell it on to Chinese companies, the report said.

Okay, so the first is what I would normally expect: cut up the business.  Normal procedure for corporate raiders and hedge funds, so nothing new.  And it does make sense if China wants to protect Huiyuan–parse it out and let other companies keep the brand.

It’s this second proposal that is really ludicrous to me.  Do you really think that Coke would want to buy Huiyuan if it can’t retain the name?  Really?  I can’t.  Coke isn’t there to just buy another supply chain…  that brand name has to be worth something for Coke to buy it, as opposed to deciding to ramp up its own operations in China.  And if the brand had no worth, then this consortium wouldn’t care.  But as we all know, it is valuable…  and that’s why this second option is plainly ridiculous.  (or patently obvious for you IP types)

Expect to see Coke hit the eject button if this ever happens.

And of course, I had to include this:

“It’s not because of narrow nationalist feelings,” the report quoted an unnamed official from one of the consortium companies as saying.

He suggested the deal could kill a champion Chinese brand if allowed to go ahead.

Yeah right.  Coke won’t kill off a Chinese brand if it can make money off of it.  It may integrate the brand or tinker with it, but kill?  That’s a bit too harsh if you ask me.  But really, it’s nationalism.  It’s the same thing that happened when Budweiser announced that it would be taken over…  the U.S. consumers were none too happy about it though the reality is that they wouldn’t be able to know the difference if anyone didn’t say anything.  Same here I would wager.  But because there is nationalism at play, that’s what could motivate such a consortium to head for the MOC.

Really, if it isn’t nationalism, what is it?  I can’t think of a good reason myself.

Dan Harris at CLB recently posted John McCain and Barack Obama’s statements about China from the American Chamber of Commerce.  Since I’ve been following this election more closely than the last, I don’t think it’s quite the yawn that Dan characterizes it as.  But that being said, it is ultimately nothing surprising.  I just wanted to highlight some because I just enjoy it too much.  (And ironically, while I have a pile of China business/law articles sitting in my mailbox, it’s hard to get motivated to write about them when there’s American politics brewing…)

First, some excerpts from John McCain:

 Seizing these opportunities, however, will require strong American leadership and an unequivocal American commitment to Asia, whose fate is increasingly inseparable from our own. It requires internationalism rather than isolationism, and global trade rather than national protectionism. When our friends and allies in the Asia-Pacific region think of the future, they should expect more—not less—attention, investment and cooperation from the highest levels of the US government.

Okay, nothing new.  But at least McCain is willing to admit that America must commit to Asia, as opposed to go isolationist.  (a la Obama)  Of course, that does have some consequences.

It must be a priority of the next American president to expand America’s economic relationships in Asia. Unfortunately, in what has become an all-too-predictable pattern, some American politicians—including the Democratic candidate for president—are preying on the fears stoked by Asia’s dynamism; rather than encouraging American innovation and entrepreneurship, they instead propose throwing up protectionist walls that will leave us all worse off. The United States has never won respect or created jobs by retreating from free trade, and we cannot start doing so now.

We also must recognize, however, that while open trade with Asia is in America’s interest, globalization will not automatically benefit every American. That’s why we must remain committed to education, retraining and help for displaced workers, regardless of whether their job went away because of trade, technological innovation, or shifts in consumer spending patterns. For Americans who have lost a job, we need to expand opportunities for further education and training that can open new doors. We need to modernize our unemployment insurance system to reflect the reality of the 21st century economy: jobs that go away no longer come back when business rebounds. We need to help displaced workers make ends meet between jobs and move people quickly on to the next opportunity.

Definitely straight talk, which may end up angering some Americans.  But it is well appreciated.  Why?  Because those jobs ain’t coming back.  At least, its pretty darn unlikely that those jobs are coming back. Yes, Americans have lost jobs.  We know that.  We see it in CNN Money every day that the economy is reeling.  But McCain has it right: the jobs aren’t coming back even if we become protectionist.  They just aren’t.  Maybe they’ll move to Vietnam or India.  But if you play tough on China in this regard, it won’t make a difference.

China has obligations as well. Its commitment to open markets must include enforcement of international trade rules, protecting intellectual property, lowering manufacturing tariffs and fulfillment of its commitment to move to a market-determined currency. The next administration should be clear about where China needs to make progress, hold it to its commitments through enforcement at the World Trade Organization and enforce US trade and product safety laws.

China’s growing power and influence endow it with the obligation to behave as a responsible stakeholder in global politics. China could bolster its claim that it is “peacefully rising” by being more transparent about its significant military buildup and by working with the world to isolate pariah states. In addition, how a nation treats its citizens is a legitimate subject of international concern in today’s world. China has signed numerous international agreements that make its domestic behavior more than just a matter of national sovereignty. To be a responsible stakeholder in the modern international system, a government must also be responsible at home, in protecting the rights of its people.

And here, McCain does the normal “let’s be a tough presidential candidate” talk.  But I don’t see it as being outrageous…  and it’s the same rhetoric as usual: IP, human rights, etc.  Nothing new.  And McCain’s conclusion is nothing new either:

China and the United States are not destined to be adversaries. We have numerous overlapping interests and I hope to see our relationship evolve in a manner that benefits both countries and, in turn, the Asia-Pacific region and the world.

Of course, you’d think they are if you read all of the media around the U.S. nowadays. They are not, and should not be adversaries. For better or worse, we need them and they need us.  And if you can’t accept that fact, then you really shouldn’t be voting.  (or you can go to fantasy land and vote for another candidate)

So overall, I find McCain’s rhetoric to be relatively straight-forward and on point.  He isn’t making too many overbloated promises, and I think he understands the reality of a global economy.

Now its Barack Obama’s turn to speak:

In the coming years, the United States and China face challenges that require fresh thinking and a change from the US policy approach of the past eight years. How the US and China meet these challenges, and the extent to which we can find common ground, will be important both for our own countries and for others in Asia and beyond.

Well, I’m curious as to what U.S. policies Obama refers to.  Because it occurs to me that (1) revoking China’s most-favored nation status would seriously anger those in China, and lead to some tension that could cause a greater hiccup in sourcing and America’s heavy reliance on China.  (2) Or perhaps Obama thinks free trade is a bad idea.  But I still don’t see how much of this has anything to do with U.S. governmental policy as much as it is a corporate decision to source in China or elsewhere by the MNCs, not by politicians.  Just because Obama is about change doesn’t mean that everything should change.

But as China’s leaders acknowledge, China must make some basic adjustments if it is to continue sustained, shared economic growth. China must develop practices that are more environmentally sustainable and less energy intensive, that boost domestic consumption as an engine of growth, that enhance the social safety net, and that encourage indigenous technology innovation. Otherwise, the country’s future performance may fall well short of its potential.

Funny, but most people in China would pin this blame on America.  (I think erroneously though…  I think both countries have a share of the blame here)  I have to just point out that it’s America that is in the best position to actually help China become more green because America has the technology.  China doesn’t.  If anyone wants to see green tech take off in China, then someone here will have to be willing to help out.  I don’t see all that many takers yet.

 More broadly, the United States supports and benefits from security and stability in Asia. We need to address the principal causes of regional tension. As I made clear in my congratulatory letter to Ma Ying-jeou on his inauguration, we support steps to build trust across the Taiwan Strait and improvements in relations between Beijing and Taipei, now more possible with good will by both sides than at any time since the mid-1990s.

This is more standard Republican fare, which makes things very interesting.  Maybe Obama is reaching out to the Taiwanese?

I know that America and the world can benefit from trade with China, but only if China agrees to play by the rules and act as a positive force for balanced world growth. I want China’s economy to continue to grow, its domestic demand to expand and its vitality to contribute to regional and global prosperity. But China’s current growth is unbalanced, and in recent years domestic consumption has actually gone down as a percentage of GDP. To increase internal demand Beijing will have to improve substantially its social safety net and upgrade its financial services sector to bring its consumption in line with international norms.

Central to any rebalancing of our economic relationship with China must be change in its currency practices. Because it pegs its currency at an artificially low rate, China is running massive current account surpluses. This is not good for American firms and workers, not good for the world, and ultimately likely to produce inflation problems in China itself.

As President, I will use all the diplomatic avenues available to seek a change in China’s currency practices. I will also undertake more sustained and serious efforts to combat intellectual property piracy in China, and to address regulations that discriminate against foreign investments in major sectors and other unfair trading practices. And I will work with the Chinese government to establish a better system for both countries to monitor products produced for export and act when dangerous products are identified.

As President, I will take a vigorous, pragmatic approach to addressing these issues, utilizing our domestic trade remedy laws as well as the WTO’s dispute settlement mechanism wherever appropriate. High-level dialogue among economic leaders in both countries is also important to achieving real progress. My approach to our economic relationship is positive and forward-looking: to remove obstructions to gaining the benefits of trade and thus to enable faster, and healthier, growth in both economies.

Okay, the WTO I can understand. And the IP thing is standard rhetoric that McCain also included.  Getting into the whole currency deflation thing is a can of worms.  (one that I don’t want to even open because I’ve seen arguments on both sides, and since I’m not an economist, am not really sure which perspective is more correct) In my view, probably not the wisest thing to mention in such an article.

I also don’t believe the last statement that Obama wants to grow the health of both economies.  All of his rhetoric so far (and you can tell, I hate political rhetoric that is only meant to convey false promises) has been to paint the U.S. v. China in a zero sum game.   And now he says that he wants a win-win situation.  Here’s some news: we are already in a pretty decent win-win situation.  It’s not great for the U.S., but do you expect from the process of outsourcing?  If you don’t expect that China will have a trade surplus, then you are dreaming.

In particular, I look to China to work with us to prevent Iran from developing nuclear weapons, to halt the genocide in Darfur and to help reverse the slide into anarchy in Zimbabwe.

Obama really likes to mention things that anger China.  Perhaps that’s his goal.  The Darfur thing is a tough card to play.  Remember that China wouldn’t even bow to the pressure of the Genocide Olympics tag.  I think this will just make China more adamant personally.

I like Obama because he’s obviously intelligent, charismatic, and an attorney.  I just can’t stand his rhetoric.  If he doesn’t tone it down if he gets into the White House, I predict some really rocky times for U.S.-China relations.  So for the sake of those relations, I can’t stop but think that McCain is a better candidate.  We’ll see come November.

Or perhaps I could rename this post, “ABA accredited school coming to China part II” (following this post about Beijing Daxue’s new law school).  I saw this article from the National Law Journal today, and since it piggy backs so well with the discussions about BeiDa’s J.D. style law school, I had to include it on my blog:

Jeffrey Lehman sat down with about 50 brand-new law students last month and watched “The Paper Chase.” At the end of the movie, they wanted to know one thing: Were all American law professors as mean as professor Kingsfield?

Lehman, dean of the just-launched Peking University School of Transnational Law, didn’t show the movie featuring John Houseman’s browbeating character to intimidate the group of Chinese students enrolled in the school’s inaugural class.

Instead, the film from 1973 served as a kind of introduction to the pressure and competition bred in American law schools, something that these students — at least to a certain degree — could expect while attending the School of Transnational Law’s U.S.-style program.

Classic movie…  but they don’t even teach that way in American law schools anymore.  I’ve found and heard from others at other Tier 1 schools that professors are far more kind and relational and less antagonistic.  Anyways…

 The first of its kind in China, the School of Transnational Law exemplifies the global spread of U.S.-style education in foreign countries. Like the school in China, a number of higher education institutions around the world are emulating the United States’ three-year J.D. program and the admissions processes.

The trend is not only an endorsement of American legal education but it also creates a consistency of training that many observers say is critical in a global legal market.

Last month, South Korea announced the debut of 25 law schools that have adopted U.S.-style programs. Recently, several Canadian law schools announced that they would switch to offering juris doctor degrees as opposed to LL.B. degrees.

Melbourne Law School in Australia this year began offering a juris doctor degree program. Japan also has revamped its legal education to a system more akin to a juris doctor program, in which students have an undergraduate degree before attending law school.

So now its BeiDa, Melbourne, and 25 schools in Korea which could be vying potentially for ABA accreditation.  (and dollars from potential law students)  That is an interesting thought.  I don’t think that even a fraction of them would get it though.

The Melbourne J.D. program takes the best of the U.S.-style legal education and combines it with a program that is “a lot more inventive and thoughtful,” Hathaway said.

His school is not seeking ABA accreditation, which gives it some flexibility in the course work offered. For example, the first class that students take is a two-week immersion into legal method and reasoning, which has a heavy emphasis on statutory interpretation. The courses that follow build upon that foundation, Hathaway said.

I don’t buy it.  Melbourne, as the article points out, started requiring the LSAT.  It may not be seeking the accreditation now, but I would say that it will want it in the future.  Is it really such a stretch if it requires the LSAT?  And wants to be on part with American law schools?  It isn’t.  So I would expect it…

Although the ABA does not specifically prohibit foreign law schools from obtaining accreditation from its Section of Legal Education and Admissions to the Bar, meeting the stringent ABA requirements that are designed for U.S. law schools may be difficult for foreign schools, said Hulett Askew, consultant on legal education to the accrediting section of the ABA.

Agreed.  Though there are others who seem to think otherwise:

Paul Hastings partner Timothy Dickinson said that the transnational law school program will train a new “cadre” of lawyers educated to handle international work.

“We now can create lawyers well-equipped to practice in a global environment without leaving China. It gives them a huge competitive advantage,” he said.

Dickinson, whose practice focuses on international commercial matters, was a member of the U.S.-China nongovernmental organization that helped establish the School of Transnational Law.

I have my doubts. But I’ve been wrong before…  so we’ll see what happens.  Stay tuned.

Sorry for the last minute notice on this, but I thought better late than never.  The Investment in China Shanghai Business Club is hosting its “Shanghai Business & Investment Social Networking Evening” on September 10 at 7pm at 748 JuLu Road (near FuMin Road) in Shanghai.  Here’s the pitch:

The social networking evening intends to provide an effective platform for businessmen in Shanghai to communicate and cooperate. In particular, this event is dedicated to facilitate investors and enterprises seeking investment to strike a deal. Do bring your  executive summary or business plan to the gathering, a good number of investors have been invited.

And the networking event also has some content in the form of discussion on the issue of “Bad Debt in U.S.-China Trade”.  Sounds interesting enough:

As the sub-prime loan crisis occurred with the increasing trade between the U.S. and China, many U.S. companies have not been able to pay for the products and services provided by their Chinese suppliers. The amount of this unpaid debt/bad loan has reached to a significant level, and it has severely affected the operation of  numerous Chinese exporters, of which many went to bankruptcy. As a well-established Chinese law firm based in Shanghai, China, we closely collaborate with U.S. law firms to help these Chinese
companies collect their debts. We will hold a series of seminars for Chinese exporters in Zhejiang, Jiangsu and Shanghai to share the current status of debt collection process.

I don’t know if you had been following the Yang Jia case (see Los Angeles Times article here) given that American politics has taken a front seat at many blogs (my posts on Joe Biden and Obama’s McCain ad; Experience Not Logic on the lame DNC China rhetoric; Silk Road International on Obama’s political pandering; and finally, CLB came out today with their survey)  But the case is interesting in that we’re seeing popular sentiment threaten court decisions and the secrecy of trials.  (in other words, the Chinese legal process being threatened by its own people)

Here are some excerpts:

An unemployed man charged with killing six Shanghai police officers in a knife attack was sentenced to death Monday, state media reported.

The Shanghai No. 2 People’s Intermediate Court found Yang Jia guilty of premeditated murder and ordered the death penalty for the Beijing man, said the official New China News Agency. On July 1, Yang stabbed a security guard at a police building in Shanghai’s Zhabei District, started a fire at the gate, then attacked nine officers inside the building with a knife.

In the wake of the stabbing attack, there has been an outpouring of comments online from citizens nationwide, as well as from Chinese media, questioning how a seemingly minor incident could trigger a rampage that left six people dead and four others injured.

Many Chinese raised suspicions that Yang was beaten by police, which Shanghai authorities denied. Police said Yang in fact had rented the bicycle, and that he demanded about $1,450 in compensation from authorities for mental anguish.

The legal proceedings and the secretive trial of Yang fanned more criticisms on Internet sites, some of which apparently were blocked or shut down Monday.

“If you and I were Yang Jia, we could be sentenced under such namely legal but unclear ways,” said one posting on a lawyer’s blog. Said another: “They have a guilty conscience, so all the websites closed the comment function for this news. This is red terror.”

Zou Rong, a professor at East China University of Politics and Law in Shanghai, said Chinese law allows some cases to be closed to the public. Nor did he see a problem with Yang’s lawyer being a consultant to the district government that is prosecuting the case.

“China is a country of law,” Zou said, “but it still is far from reaching the full construction of its legal system.”

A few comments.  First, I think its a good thing that Chinese law is being challenged on whether a case should be opened to the public.  It is true that in America, cases or particular pieces of a case can be sealed from the public/media.  But it isn’t that easy to pull off and there is usually vociferous argument from the media side whenever this happens.  So when it does happen, there is (hopefully) good reason to seal parts of a case.  One way the trial system can further develop is greater transparency…  and what better way than to have public sentiment fuel that transparency?

Second, I don’t think anyone can take Zou’s comments all that seriously.  It isn’t a country of law yet.  Rule of law is growing and I think everyone acknowledges that.  But it isn’t there yet.  Perhaps this ranks up there with Joe Biden’s rhetoric…

Third, even I see some huge conflict of interest issues with Yang’s lawyer consulting with the prosecutors.  In America, that would never fly.  No way.  Even if a judge were sleeping on the case, he or she would still catch that one.  That’s pretty far out in my book.  And if the court system wants an easy out of this dilemma, they will probably just re-try Yang Jia based on this conflict of interest reason.  At least, that’s what I would do if I were in their shoes.

Finally, I want to see how the courts will respond to public pressure.  Sure, there is some censorship happening.  But if the public in China continues to be outraged, I want to see how courts respond.  It’s no secret that the judicial branch can sometimes be influenced by the public and the media, so I want to see if the Chinese judiciary develops some sort of give and take with the public for the sake of social order.

Stay tuned.  This will prove interesting.