The U.S.-China Business Relationship – The Most Important Issues: A Complex Balancing Act
Overview:The relationship between the U.S. and China is the most important in the world. Whether the two nations can co-exist may be a significant political and economic challenge.
Under President Xi Jinping, China’s policy is changing quickly, with greater consolidation of power and more strategic economic and market reforms. There is interest in taking some limited measures to control state enterprises, but not to reduce the power of the Communist party.
China faces formidable challenges from environmental degradation, internal dissent, and changing demography due to the ‘one-child per family’ policy. Tension between China and the U.S. increases regarding numerous issues such as the instability of North Korea, maritime security in the South China Sea, human rights, data and information theft, cyber-attacks, and trade disagreements.
Many specific, contentious issues exist. Among these, the Chinese government has invested in many Western firms, such as Dalian Wanda’s acquisition of AMC, and it is unclear whether the U.S. Committee on Foreign Investment might obfuscate further investment. The Chinese government has been trying to control corruption, and securities violations thereby affecting domestic and foreign companies. Antimonopoly review of transnational mergers by China’s Ministry of Commerce has become a significant consideration in global M&A transactions, and many foreign companies operating in China have faced antimonopoly investigations and private litigation over their pricing and licensing practices, raising concerns that the Antimonopoly Law is being used for industrial policy reasons, rather than to promote competitive markets in China. Although China has some intellectual property (IP) protection policies for foreign multi-nations, it has a long-standing reputation as a haven for violators of IP law and deep concerns remain as stated recently by the Assistant US Trade Representative for Intellectual Property and Innovation in a report on behalf of the US-China Business Council . Many Chinese students who studied in the United States now are senior government or business officials in China. US law previously did not affect China too substantially. However, many Chinese companies now are affected by far-reaching U.S. laws, regulations, investigations, or litigation. Perception of political and economic bias in the US review of mergers or in application of U.S. laws such as FCPA have resulted in reciprocal, retaliatory actions by China.
Nevertheless, there is substantial co-operation and agreement on many issues between the two nations at all levels of society and across most industries. Recently, Chinese regulators have targeted professional bankers, accountants, and lawyers working on suspect initial public offerings. Issuance of new IPOs was suspended for a year. The Chinese government appears to be interested in adopting a modified U.S.-style [IP disclosure regime].
Yet, it is not clear whether the substantially different approaches to the law and commerce in general will lead to a better and more common understanding between the U.S. and China or lead to greater mis-understanding and tensions. Nor is it clear how this critical relationship might change and affect the global economy.
In this webinar, a group of experts in their fields will discuss the pertinent issues of Chinese investment, trade, capital markets, and compliance and conflict with regulations, laws, and resulting litigation.
- Chinese Overseas Investment Outlook
- Foreign Investment Trends
- Capital Markets
- Regulation, Compliance, and Transparency
- Intellectual Property, Licensing, and Reform
- Antimonopoly Law Enforcement and Private Litigation
- US China WTO Agreement and US Anti-dumping Law
Weisun Rao, Ph.D., Shareholder
Greenberg Traurig, LLP
- Intellectual Property in China: a changing legal framework that has brought both opportunities and challenges to U.S. businesses.
- Chinese Investments in the US: recent trend.
- China’s Latest Reform of State-Owned Enterprises: what can we expect and what can US businesses potentially gain from it?
Stuart M. Chemtob, Senior Of Counsel
Wilson Sonsini Goodrich & Rosati
Enforcement Against Anticompetitive Conduct
- Chinese Antimonopoly enforcement authorities seem to be targeting foreign companies for alleged abuses of intellectual property rights based on conduct that would generally not violation the competition laws of other major jurisdictions.
- Patent licensing practices and many other vertical restraints are being treated as per se illegal by the enforcement authorities, although at least one Chinese court has applied a rule of reason analysis to vertical resale price maintenance.
- Penalties in China for an abuse of a dominant market position may be the highest in the world, with a maximum penalty of ten percent of the respondent’s previous year’s global turnover plus disgorgement of excessive profits.
- Due process and procedural fairness concepts are not well-developed in China and have not been embraced by the Chinese antimonopoly enforcement agencies, presenting real challenges to presenting an effective defense in investigations of alleged anticompetitive conduct.
Steve Harris, Partner
Winston & Strawn LLP
- Industrial policy-driven behavioral conditions imposed by MOFCOM on recent significant foreign-to-foreign mergers and acquisitions
- NDRC and SAIC Anti-Monopoly investigations into commercial practices of foreign leaders in high tech industries
- NDRC’s increased activity in foreign cartel investigations
Su Sun , Vice President
- Economic analysis is increasingly used in antitrust merger review at MOFCOM – how the analytical tools may be adapted to China’s particular context and policy objectives
- Business strategies such as product distribution and pricing schemes that may seem benign in the U.S. may be subject to antitrust sanctions in China – how China’s enforcement agencies and courts may approach these issues differently
- Patent licensing and royalty determination for standard essential patents (SEPs) are a developing area in all jurisdictions, and more so in China – how more structured analysis may bring an acceptable framework for adjudicating disputes
- All of the above points will be discussed in comparison to the antitrust practice in the U.S.
Who Should Attend:
- Trade Experts
- Trade Lawyers, General Counsel and Corporate Attorneys
- Trade Regulators
- Multi-national Firm CEOs and CFOs
- Commercial and Contract Managers
- International Business Development Managers
- Corporate Heads (Executive Directors, Finance Directors, Managing Directors, Controllers, Analysts)
Dr. Weisun Rao focuses his practice on intellectual property law and business law. He is experienced in developing IP strategies and building and managing IP portfolios for legal and business opportunities in the United States, China and elsewhere in the world. Additionally, Weisun also advises clients on monetizing and enforcing their IP rights throughout the world. He counsels clients on IP and business issues in the pharmaceutical, biotechnology, nutraceutical, medical device, advanced material and mechanical industries. Weisun is also experienced with due diligence and counter-diligence investigation, negotiating and drafting technology transfer agreements and licensing agreements, and providing patentability, validity, infringement, and freedom-to-operate opinions.
Weisun is involved in such business transactions as cross-border mergers and acquisitions. He is particularly experienced in advising non-Chinese clients on legal regulations and business practices in China and advising Chinese businesses interested in entering or expanding in the U.S. market.
Dr. Weisun Rao focuses his practice on intellectual property law and business law. He is experienced in developing IP strategies …
Stuart Chemtob is Senior Of Counsel in WSGR’s Washington, D.C. office, where his Asia-oriented practice focuses on representing companies and individuals in criminal and non-criminal antitrust investigations in the United States and providing global strategic antitrust counseling. He has appeared before China’s National Development and Reform Commission on behalf of American companies that have been the subject of investigation. He previously served as Special Counsel for International Trade in the Antitrust Division, where he advised on international enforcement, mutual legal assistance and extradition matters, and was the Antitrust Division’s liaison to the antitrust enforcement agencies in Asia. Stuart was the lead Department of Justice official on relations with China’s antimonopoly agencies (MOFCOM, NDRC, SAIC), spearheading negotiation of the U.S.–China MOU on Antitrust Cooperation and providing advice and training to the Chinese government on the drafting and implementation of the Antimonopoly Law.
Stuart Chemtob is Senior Of Counsel in WSGR’s Washington, D.C. office, where his Asia-oriented practice focuses on representing companies and …
Steve Harris is a partner in the firm’s Washington, D.C. and New York offices and concentrates his practice in antitrust/competition law, including litigation, cartel defense, merger control filings, and administrative proceedings before U.S. and international courts and agencies. He has particular experience working with clients in China, Korea, Japan, and Taiwan.
Mr. Harris’ representative matters include:
- Represented a major U.S. consumer products company in antitrust cartel investigation and follow-on class action litigation.
- Represented a European chemicals manufacturer in antitrust cartel investigation in the United States and EU, and in follow-on class action litigation.
- Represented a leading personal computer manufacturer in an antitrust and patent infringement action involving MPEG data compression technology.
- Represented a major international airline before antitrust and regulatory agencies in Asia and the United States in a successful global effort to retain its multi-year joint business agreement with one of Asia Pacific’s leading airlines.
- Represented a leading U.S. biotechnology company in worldwide antitrust and merger control issues related to USD500 million acquisition by European multinational crop science company. This matter was granted early termination by the U.S. Department of Justice Antitrust Division.
- Represented Prestige Brands Holdings Inc. in the worldwide antitrust and merger control issues related to its USD660 million acquisition of the over-the-counter pharmaceutical brands business of GlaxoSmithKline, Prestige’s largest acquisition ever. The matter involved two transactions and interesting issues under the U.S. Federal Trade Commission’s aggregation rule; the FTC granted early termination.
- Represented a leading global information services company in worldwide antitrust and merger control proceedings; the merger presented several unusual competition law issues, including the application of the “media merger” rules in Germany and Austria.
- Represented a leading specialty minerals company based in France in the U.S. antitrust and merger control issues related to its USD665 million acquisition of a talc business.
- Represented a leading global medical technology company in the worldwide antitrust and merger control proceedings in its acquisition of a Swedish company involving issues related to complementary versus competitive products in several jurisdictions.
- Represented a leading multinational resources company in the review of a joint venture with another large resources company under the China Anti-Monopoly Law.
Mr. Harris received his A.B., magna cum laude, from Cornell University in 1977. He received his J.D. from Columbia Law School in 1982, where he was certified with honors by the Parker Program in Foreign and Comparative Law, and was a Harlan Fiske Stone Scholar.
Steve Harris is a partner in the firm’s Washington, D.C. and New York offices and concentrates his practice in antitrust/competition …
Dr. Su Sun is a Vice President at Economists Incorporated. He specializes in economic analysis in antitrust and regulatory matters. He has conducted economic analysis for antitrust review of mergers before the U.S. Department of Justice and Federal Trade Commission, Canadian Bureau of Competition, and China’s Ministry of Commerce. He has also worked on estimation of damages in a number of price fixing cases, and has provided analysis in some abuse of dominance cases, including those involving bundled discounts, exclusionary practices and the licensing of patents.
Dr. Sun has written extensively on antitrust issues, particularly those pertaining to China, both in English and in Chinese. He is a Senior Editor of the Antitrust Law Journal, a member of the American Economic Association, and a member of the Chinese Economists Society. Dr. Sun earned his Ph.D. in economics from the University of Michigan and his B.A. from Renmin University of China.
Dr. Su Sun is a Vice President at Economists Incorporated. He specializes in economic analysis in antitrust and regulatory matters. …
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Method of Presentation:
On-demand Webcast (CLE)
NASBA Field of Study:
Specialized Knowledge and Applications
NY Category of CLE Credit:
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Winston & Strawn has extensive experience advising multinational companies in connection with merger reviews in numerous Asian jurisdictions, including China, Japan, Korea, and Taiwan, as well as in connection with government investigations and litigation. Through our offices in the Asia-Pacific region, as well as through our experienced practitioners based in the U.S., we are frequently involved in leading merger and cartel cases and investigations. While many of these cases run parallel to related proceedings in the United States, EU, and other jurisdictions we have mastered successful coordination to ensure an efficient and consistent worldwide approach with proven results
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Economists Incorporated is a premier economic consulting firm in the fields of law and economics, public policy, and business strategy. Headquartered in Washington, D.C., EI offers expert consulting and testifying services in the context of litigation, arbitration, proposed mergers and acquisitions, regulatory hearings, and business planning. Its clients include legal counsel, businesses, trade associations, government agencies, and multilateral organizations. Since its founding in 1981, EI has participated in path breaking and high profile antitrust, commercial litigation, and regulatory matters. EI’s work has covered a large number of industries and multiple jurisdictions. EI’s Asia practice has focused primarily on work before antitrust enforcement agencies and courts in countries such as China and South Korea, and is led by highly experienced economists who speak the local language and understand the local market.