PART I Regulations Update

Overseas media focuses on China's electoral law amendments

China's ongoing annual parliamentary plenary sessions has collected growing attention from overseas media and the draft amendments to electoral laws have topped their focus list.
The centerpiece of the amendments seeks to grant equal representation to the country's legislatures at all levels, ensuring equal representation among people, regions and ethnic groups, said an article published on the U.S. web site of the Qiaobao newspaper.
The article hailed the amendments as a way to eliminate the obsolete contents in the electoral law and realize equal voting right principle, which would demonstrate the constitutional spirit of "all people are equal before the law" and further enhance the representativeness of the people's congresses, China's fundamental political system.
The amendment to the election law of the National People's Congress would foster equality among the nation's constituencies, Agence France-Presse quoted Wang Zhaoguo, vice chairman of the NPC Standing Committee, as saying last Friday in his speech to the congress.
Wang said rural delegates now represent four times as many citizens as their urban counterparts, which effectively gives urban areas greater representation, adding that the amendment would equalize those ratios.
The Associated Press said China, once an overwhelmingly rural society, is boosting representation for its dwindling rural population in the national legislature as part of a new push to narrow the development gap between city and countryside.
The Japanese newspapers Yomiuri Shimbun and Asahi Shimbun said the amendments have reflected China's hopes to shift more attention to the rights of rural population.
South Korea's Joong Ang Daily said in an article that these amendments to equalize the ratio of China's legislature representatives among urban and rural population, if adopted, would be a great strides for its democratic politics.
Nouvelles d'Europe, one of France's foremost Chinese dailies, said balancing the urban-rural delegates will further the election's universality and equality to protect people's rights as the country's masters.
Singapore's Lianhe Zaobao said as China's NPC has begun to deliberate the electoral law amendments, which aims to give equal representation among its people living in the cities and rural areas, will end the history of unbalanced voting rights if passed

(Source: Xinhua)

Senior Chinese legislator calls for awareness of law on women

A senior Chinese legislator has called for greater efforts to promote women's awareness and ability to safeguard their legitimate rights and interests.
Chen Zhili, vice chairwoman of the Standing Committee of the National People's Congress, China's top legislature, made the remarks during a week-long inspection tour of the eastern Shandong Province ending Wednesday.
Chen was sent by the top legislature to inspect how local law enforcement agencies implemented the Law on the Protection of the Rights and Interests of Women.
The law, which took effect on Dec. 1, 2005, had played an important role in protecting women's legitimate rights, raising their social status and mobilized them in the country's modernization drive in an active and innovative manner, she said.
She called for more efforts to publicize the law to make people aware of the law's significance in protecting women's rights.
Chen, also chairwoman of the All-China Women's Federation, said Chinese women faced challenges such as discrimination and a lack of labor rights.

(Source: Xinhua)

China strenthens law to prevent sale of women and children

Four Chinese law-enforcement departments have jointly issued a circular to further protect the rights of children and women, making the sale of one's child a crime.
Parents who sell their own children for profit are in violation of laws designed to prevent the trafficking of women and children, the circular said.
But the circular recognized that some parents give away their babies because they cannot afford to raise the child or because they would prefer a boy rather than a girl, and such acts are not to be considered trafficking of women and children.
The circular also clarifies the charges the buyers of children and women may face.
The circular, released by the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Justice and the Ministry of Public Security, was published on the website of the Public Security Ministry Friday.
(Source: Xinhua)

PART II Forthcoming Legislations

China's new credit rules put brakes on banks' lending binge

With Chinese banks' record new lending in 2009 igniting fears about asset bubbles and bad loan, the banking regulator's latest rules aim to bring financial risk under control.
The new directives order banks to focus on loan quality control, rather than quantity restriction, and aim to make loans flow to the real economy -- rather than the property and stock markets, which are susceptible to asset bubble formation.
Analysts say the directives are a smart way to handle the policy dilemma the central bank faced: with inflationary pressures growing after increased money supply, how can monetary policy be tightened without hurting the fragile economic recovery?
The China Banking Regulatory
Commission (CBRC) issued new regulations on Saturday evening telling banks to set lending quotas after "prudent calculation" of borrowers' "actual demand".
It also reiterated working capital should not finance fixed-asset investment and equity stakes. The new rules also ask lenders to give funds directly to the end user declared by the borrower, instead of directly giving it to the debtor, in an effort to ensure loans are used for their declared purpose.
Execution of the directives will help banks exit the "credit stimulus spree", as they pay more attention to risk control. The directives are crucial for the banks' sustainable expansion, said Yu Xiaoyi, analyst with Guangfa Securities.
Loose oversight and easy monetary policy have led to many banks developing the bad habit of being excited about loan extension but indifferent to the tracking of loan use, which can result in credit appropriation, an unnamed insider told Xinhua.
That allowed many Chinese enterprises to borrow much more than they needed in order to speculate with various types of investment, even though they had ample funds on hand for their routine business operations.
In support of the government's 4-trillion yuan stimulus package, Chinese banks lent an unprecedented 9.6 trillion yuan in 2009, nearly half of 2009 gross domestic product.
Researchers said that large amounts of the borrowed funds went into property and stock market speculation, further pushing up soaring house prices and further inflating asset bubbles.
According to official data released by CBRC, some regions reported two to three percent of funds were misappropriated.
Wang Kejin, an official with the Supervision Rules and Regulation
Department of CBRC, told Xinhua "the current working capital and individual loans exceeded real market demand,"
The inadequate monitoring of loan use demands improvement, otherwise creditors will suffer losses and systemic risks will build, the CBRC said in a statement on its website.
"Our purpose was to prevent it happening," the statement said.
Ba Shusong, a researcher with the Development Research Center of the State
Council, China's cabinet, said the new rules will further strengthen credit risk controls and put a "brake" on lending and keep the financial system in good health,
Guo Tianyong, a professor with the Central University of Finance and Economics, said the new directive will prevent systemic risk after the rapid expansion in credit.
Although the CBRC and the nation's central bank have repeatedly warned banks to maintain an even pace in lending growth and to avoid big fluctuations, new yuan loans hit a massive 1.39 trillion yuan in January, as banks scrambled to lend before an expected tightening in credit later in the year.
CBRC chairman Liu Mingkang said on Jan. 27 the Chinese government is aiming to restrict credit supply to 7.5 trillion yuan (about 1.1 trillion U.S.dollars) in 2010.
Analysts expect short-term loans to fall significantly on account of tougher lending requirements that prevent businesses using new loans to repay old credit, a phenomena rampant when bill financing with 180-day maturity comprised nearly half of new loans in the first quarter of 2009.
To soak up the excess liquidity on the heels of lending spree, China has raised the deposit reserve requirement ratio (RRR) twice this year, after holding it steady for over a year, to handle the "comparatively loose liquidity" while keeping the "moderately easy" monetary policy unchanged.
Jing Ulrich, Chairman of China Equities and Commodities at JP Morgan Chase, estimated China's new lending would fall 17 percent this year as the government takes steps to prevent inflation.
"While lending support for real economic activity is expected to continue, banks are likely to be more vigilant on shorter term credit facilities, given the regulator's anxiety over asset bubbles and capital adequacy ratios," she said.

(Source: Xinhua News )

PART III Economy and Law

China to boost financial support for cultural industries

China announced Thursday it had issued a national policy guideline to enhance financial support for the country's cultural industries.
The guideline was jointly issued last month by the People's Bank of China, the central bank, the Publicity Department of the Communist Party of China, the Finance Ministry, the Culture Ministry, the broadcast administration, the publishing watchdog, the banking regulator, the securities regulator and the insurance regulator.
Relevant departments should make joint efforts and tap various financing resources to improve financial services for cultural enterprises, the guideline said.
The guideline called upon financial institutions to develop credit products and establish proper credit grading and evaluating systems in line with the needs of cultural enterprises.
The guideline also urged the establishment of a multi-tier capital market to enhance direct financing for cultural enterprises.
Eligible cultural enterprises should be encouraged to list while mergers and re-structuring should be encouraged for those which are listed, the guideline said.
Bond issuance by cultural enterprises is to be promoted and financial agencies are encouraged to cut fees to reduce fund-raising costs for cultural enterprises, it said.
Various market participants should be invited to invest in the cultural sector, said the guideline.
More efforts should be made to involve insurers in the cultural products industries on the basis that risks can be controlled.
Investors, such as venture funds and private equity funds, are encouraged to join in new-born and promising cultural sectors, said the guideline.
The guideline was welcomed after the announcement.
Financing difficulties have become the biggest bottleneck for cultural industries' development, said Wang Yafei, president of Anhui Publishing Group.
The preferential financing for cultural industries outlined in the guideline shows the government has recognized the financing problem facing China's cultural enterprises and is applying different policies, he said.
It would help fully unleash the productivity of cultural firms, said Han Sanping, chairman of the China Film Group, the country's biggest film producer and distributor.
It is impossible for cultural enterprises faced with high financial risks to focus on artistic creation, he said.
China's filmmakers derive 90 percent of their revenues from ticket office. In contrast, the share for their Western counterparts is only 30 percent -- the other 70 percent comes from derivative products like toys and music, according to Han.
"This means that China's filmmaking industry chain is not complete and financing for developing derivative products is urgently needed," said Han, adding that his company is actively preparing to go public.
Wang Zhongjun, chairman of Huayi Brothers, one of China's largest filmmakers, echoed Han and said that preferential financing will help ease the financial risks of cultural enterprises.
Huayi Brothers, one of the first batch of firms listed on China's Nasdaq-style second board, ChiNext, has raised 1.2 billion yuan since its listing, according to Wang.
He also said Huayi is planning to enter the online game sector and is considering raising funds through bond issuance.
China's State Council, the cabinet, adopted a plan to promote the country's cultural industries in July last year, calling for more efforts to develop enterprises involved in cultural innovation, film production, publication, advertisement, entertainment, exhibition, digital content and animation
(Source: Xinhua News )

China's banking regulator calls to boost cross-border regulation

China Banking Regulatory Commission (CBRC) Chairman Liu Mingkang Sunday urged countries to boost cross-border financial regulation to prevent future crisis.
China's banking system remained sound out of the global financial crisis due to prudent and effective risk control, Liu told a forum at the Boao Forum for Asia annual conference in south China's island province of Hainan.
He said that it is important for the financial system to return to fundamentals and properly control leverage.
All Chinese banks have been ordered to report to the CBRC their risk exposure to lending projects by the end of June. The CBRC will sent out a team in the third quarter to check up the truthfulness of the reports, Liu said.
The regulator will also boost supervision over banks lending in the property sector by checking the borrowers' credit conditions and banning developers from using land as guarantee, he stated.
The banks should markedly raise down payment requirements and also lending rates if they are not certain of the risks involved in some mortgage loans, he said.

(Source: Xinhua News )

PART IV Introduction to the Firm

Guangdong United Intellectus Law Firm is a full-service law firm with over 20 Chinese and international lawyers of whom some have practiced law in the United States, China and Hong Kong.

In cooperation with law firms around the world, especially with Tsoi & Associates in Los Angeles, California, and Sinkler & Boyd in Columbia, South Carolina, we are able to serve our clients around the clock, as well as working in all kinds of litigation and non-litigation commercial and IPR matters. The allocation of work in the association is based on expertise of the working staff rather than who they work for.

Through this close cooperation, we are able to provide clients with quality legal services that match international practice standards and meet their sensitive needs in the unique Chinese legal environment. We have advised foreign invested enterprises in all industries and assisted many in acquisition and shareholding interests transfer transactions.

The Chinese and foreign lawyers in the association are experienced in domestic and foreign related dispute resolution process, including mediation, arbitration and litigation.

LEGAL SERVICES

Chinese and foreign attorneys of the association have profound practical experience in domestic business litigation, mediation, arbitration and litigation on disputes in foreign economics. These attorneys have represented international clients such as Kodak, Cartier, Montblonc, Piaget, Nissan, Wrigley and Microsoft in
protection of their legal rights.

The main legal services of the association cover but not limited to the following areas:

Annual retainer services, including providing general commercial counseling and contract review requiring no substantial research work, one hour of corporate internal legal training each month, and China Law Update, a quarterly publication of the association;

Commercial transactions, trade, manufacturing, corporate, merger and acquisition, liquidation and bankruptcy, customs and tax planning, labor practices, registration and enforcement of intellectual property rights, real estate development and property management, contract drafting and revision, government approval and public relations, advertisement and unfair competition claims, due diligence and legal opinion to be issued by qualified Chinese lawyers;

Overseas investment and listing, establishing foreign branches for domestic companies, overseas applications and enforcement of intellectual property rights, overseas merger and acquisition; and

Domestic and international dispute resolution through mediation, arbitration and cross-border civil litigation.

MEMBERS OF THE FIRM

Rose Baochun Zeng, B.A., LL.M and J.D., admitted to practice law in China and California, U.S.A. With over thirteen (13) years of practice experience, Ms. Zeng’s major practice areas include corporate and commercial matters, IPR enforcement, dispute resolution and litigation. She is a director of Guangdong Society of Intellectual Property Rights and a panel arbitrator of Guangzhou Arbitration Commission;

William C. Ren, B.A. and J.D., admitted to practice law in China and California, U.S.A. With over six (6) years of practice experience, Mr. Ren’s major practice areas include foreign investment project setup, corporate and commercial matters, IPR protection and labor law;

Michael Y. Qin, B.A. and LL.M, admitted to practice law in China. With over thirteen (13) years of practice experience, Mr. Qin’s major practice areas include foreign investment project setup, commercial matters, civil and criminal litigation;

George L. Sun, LL.B, admitted to practice law in China. With over five (5) years experience as a judge in a district court in Guangzhou and six (6) years of practice experience as a lawyer, Mr. Sun’s major practice areas include commercial and civil litigation;

Ke Y. Chen, LL.B, admitted to practice law in China. With over five (5) years of practice experience, Mr. Chen’s major practice areas include commercial, real estate, and civil litigation; and

Fei Huang, LL.B, admitted to practice law in China. With over five (5) years of working experience with the Legislation Committee of the Guangdong People’s Congress and two (2) years of practice experience as a lawyer, Mr. Huang’s major practice areas include commercial matters, civil litigation, and administrative proceedings.

MAJOR CLIENT LIST

A major U.S. headquartered multinational software company in IPR protection matters, including administrative enforcement, civil litigation and criminal litigation;

A major U.S. headquartered multinational imaging and photographic film company in commercial and IPR protection matters;

A major U.S. headquartered bowling equipment manufacturer in IPR protection matters;

A major Swiss headquartered multinational luxury goods group company in commercial and IPR protection matters, including administrative enforcement, civil and criminal litigation;

A France headquartered multinational fashion company in IPR protection matters, including administrative enforcement and civil litigation;

An Australia headquartered quarry company in administrative hearing, including zoning, government lobbying and administrative appeals;

A Belgium headquartered multinational construction material company in corporate and commercial, and IPR protection matters;

A leading U.S. headquartered internet information service provider in hacking and criminal litigation matters;

A major Hong Kong headquartered multinational bank in IPR protection matters;
A major U.K. headquartered group company’s Hong Kong subsidiary in unfair competition and IPR protection matters;

A major U.S. headquartered multinational confectionary company in general commercial matters and litigation matters; and

A major Japanese steel manufacturer in investment, corporate and commercial matters.

In additional to being legal counsel to the Hong Kong Chamber of Commerce in China–Guangdong, our attorneys are consulted by the U.S. Consulate General Guangzhou, Australian Trade Commission of the Australian Consulate General Guangzhou, and Hong Kong Trade Development Council for our legal opinions regarding China related matters.

QUALITY OF SERVICES AND FEES

Guangdong United Intellectus Law Firm enables our clients to enjoy legal services of international standard at reasonable charging rates. It further makes it possible for us to upgrade and rationalize our staffing and training, services and expertise, computer networking, legal information and client file management.  This, in turns, leads to a more focused and cost efficient China practice, as we may allocate work based on the expertise and legal skills of our bi-cultural staff rather than on the firm line.

Generally, our professional staff, that is, lawyers and assistant lawyers, will charge fees based on the time spent on the particular legal matter. Their billing rates vary based on the experience and legal skills of the individuals and their rates cover all our charges other than disbursements such as government fees, communication and traveling expenses. Unless instructed by the clients to work overtime, our secretaries will not charge fee for work done during normal office hours.

For budgeting purposes, we can provide our clients with a legal cost estimate or agree to work for a fixed fee in certain matters.

We may require that our clients pay a retainer or deposit some fees to our client accounts prior to the commencement of work. The clients will be billed on a monthly basis at the end of each month.  The balance of the deposit will be returned to the clients once the service is completed.

The lawyers of the association firmly believe that we can, through teamwork, provide our clients with quality full-scale legal services that meet with international standards. For additional information, please contact Ms. Rose Zeng, the coordinator of the association.

Guangdong United Intellectus Law Firm

Add: Room 1501-1502, North Tower,
Guangzhou World Trade Center,
371-375 East Huanshi Road,
Guangzhou, PR China
Direct: (8620) 8762-6262
Tel: (8620) 8769-4790 or 8769-4797
Fax: (8620) 8769-4799
Http://www.uilawfirm.com
Email: gzrose@uilawfirm.com
gzrose@pub.guangzhou.gd.cn

Affiliated Offices
Los Angeles, California
Monterey Park, California
Columbia, South Carolina
Hong Kong, China