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Fifth meeting of the study group on German and Chinese law (September 25th, 2007)

Ms. Dr. jur. Jing Sun, Director of the Legal Department of the Foreign Chamber of Commerce (AHK) Shanghai gave a presentation on the topic "Contract types in business dealings with China"

For the 5th meeting of the study group we were able to invite Ms. Dr. jur. Jing Sun, Director of the legal department of the Foreign Chamber of Commerce (AHK) Shanghai, which is a suborganisation of the German Chamber of Industry and Commerce. Her presentation dealt with the topic "Contract types in business dealings with China".

Ms. Dr. Sun studied law in Nanjing and in Göttingen and obtained her doctorate at the Chair of Prof. Dr. Blaurock in Freiburg, working on the subject "Legal protection for the allocation of public contracts in China and Germany".

Ms. Dr. Sun first explained her occupation at the Foreign Chamber of Commerce and then, entitling the first part of her presentation "market entry", began speaking about the typical steps of a German firm becoming engaged in business in China. In most cases, she explained, these business dealings begin with pure export. In a second step, the business develops its own structure of distribution, until, finally, production, also, is based in China. Here Dr. Sun especially addressed the issue of the type of company chosen for the Chinese segment of the German business in its different phases of development and related problems.

In a second part of her presentation, Dr. Sun then spoke about the systemic legal and cultural differences between China and Germany, illustrating her comments on the mentality of Chinese entrepreneurs with several anecdotes from her own professional experiences.

Subsequently, Dr. Sun highlighted particularities regarding contract types. She introduced her comments with the observation that difficulties are rare, since China has, to a large extent, adapted the German civil code. However, certain regulations, such as special prohibitions or restrictions regarding importation and exportation, as well as, the obligation to register certain contracts, such as lease and licensing agreements, must be observed. In addition, important questions such as the choice of language and legal system, as well as, the establishment of the place of jurisdiction must be clarified ahead of time.

Finally, Dr. Sun gave an overview of typical problems in business practice. She said the most commonly asked question was that concerning the protection of intellectual property. With regards to this subject, Dr. Sun commented that the legal system of China is very well developed, but that the violations of intellectual property taking place in practice are problematic. Nevertheless, she said, a positive development was underway: sometimes the public authority even routinely research the factual circumstances of the case. She called attention to the fact that one of the biggest mistakes of German businesses was failing to register the trademark or patent for China specifically, having concluded a registration with a regional limitation to Germany or Europe. If a registration in China exists the legal or administrative process should be promising. In practice, however, cases of delayed payment or inadequate quality predominate over those of violations of intellectual property.

The study group thanks Dr. Sun for her riveting presentation.

Arbeitskreistreffen (25.09.07) Dr. Sun



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