Tuesday, October 2, 2007

Chinese in Hawaii

Except for the southern part of China, most parts of China can be very cold in winter and there are no beach worthy of visit in China except for some obscure ones. In contrast, Hawaii is warm all year round, have plenty of beautiful beaches and have culture and food quite different from China. Actually, not exactly completely different because there is a sizable population of ethnic Chinese in Hawaii, making up 4.7% of the state's population, many having ancestors from Zhongshan in Guangdong. If you count those of Chinese and Hawaiian descent, the percentage will be higher. Although most of them have converted to Christianity, there is still a small pocket who have stuck on to traditional Chinese religions and there are still some 100 Buddhist and ancestral temples on the Hawaiian island. There is even a Chinatown in Honolulu, bordered by Nuuanu Avenue on the east, North Beretania Street on the north, and South King Street.

Honolulu, the capital of the State of Hawaii, is located on Oahu Island, and you can find more information on Oahu Island at vacation rental information. The site says "We will also be venturing out to different locations around the world to see what they have to offer", so don't be surprised if you see Chinese locations being featured on that site one day. All that is needed is for someone to add a comment about some interesting place in China by clicking on "Leave a comment". So if there is anyone wanting to promote his hometown or his favorite place in China, here is your opportunity.

Not only will you have an opportunity to do your patriotic act for your hometown, your favorite place, your country, if you are a property owner, real estate agent or property manager, rentals also allows you to list your properties or properties under your care for free.

If you plan to see Chinatown in Honolulu, Oahu Island, you might as well take the opportunity to visit the many beautiful beaches on Oahu, among which is Makua Beach, a long wide white sand beach about one mile long that is undeveloped and uninhabited. This would be ideal if you want to be away from the crowd, but be careful if you want to swim there, for high surf generates dangerous water conditions and no lifeguards are stationed there.

Oahu is only one of eight main islands of Hawaii. There is Hawaii Big Island, Maui and others. And on these islands, there are tourist spots that might of of interest like Waikiki (who doesn't know Waikiki>), Kihei, Wailea (rich man's playground), etc. You can find links to these places at vacation rentals.

Friday, August 31, 2007

What may attract a Chinese to visit United States

Let us try to figure out what may attract a Chinese in China to visit United States of America. It is said that Chinese are gamblers. That is a very sweeping generalisation as I am sure that there are Chinese who hates gambling. But it is also true a significant percentage of Chinese are habitual gamblers. Some are thoughtless gamblers, gambling in casinos, lotteries and sweepstakes even when the odds are staked against them. Some are businessmen who take calculated risks which may be almost considered as a kind of gambling. Those who support the view that Chinese are gamblers points out that many Chinese, particularly those American-Chinese from Chinatown who visit Las Vegas usually visit for the purpose of gambling and American-Chinese find the special cheap packages that comes with weekend shuttle buses shuttling busily between the Chinatowns and gambling cities including Las Vegas and Atlantic City, irresistible.

Since gambling is illegal on the Chinese mainland, and if what is said above is true, then a popular destination for mainland Chinese will be Las Vegas, the gambling capital of the world. If so, they should look at Las Vegas vacation rentals.

Palm Spring is a resort town also situated in a desert about 110 miles east of Los Angeles, also dependent upon tourism. It has some of the best golf courses in the United States. Major recreation in Palm Spring are swimming, tennis, horseback riding and hiking in the beautiful desert and mountain regions. It is not unusual to swim in 80-degree water. Palm Springs lies at the foot some of South California's most majestic snow covered mountain peaks, including the 10,834-foot San Jacinto Peak. Palm Spring has attracted a large community of gays who are estimated to make up 35% of the year-round residents. In fact, its elected Major is Ron Oden, a progressive African American and a gay.

The Palm Springs Aerial Tramway will take you to the top of Mount San Jacinto where you can get a breathtaking views of the surrounding area, go hiking, enjoy the cooler temperature or enjoy a drink at the full service bar.

If you want to gamble, there are The Palm Springs Spa Casino, Agua Caliente Casino, Fantasy Springs Resort Casino, Spa Resort Casino, Spa Hotel and Casino and the soon-to-be-opened Agua Calilente Casino Hotel.

For accommodation in Palm Spring, try Palm Springs vacation rentals.

Lake Tahoe is actually the name of a large freshwater lake in the Sierra Nevada mountains of the United States divided by the border pf California and Nevada known its water clarity and the panorama of surrounding mountains on all sides. However, the name Lake Tahoe is also applied to the area surrounding the lake. There are many ski resorts, summer outdoor recreation, marinas for boats and other tourist attractions. Gambling is legal on the Nevada side of Lake Tahoe which has 6 major casinos including Harrah's Lake Tahoe, Harveys Lake Tahoe, Lake Tahoe Horizon Casino Resort, Bill's Casino Lake Tahoe, MontBleu Resort Casino & Spa and Lakeside Inn.

For accommodation, go to Lake Tahoe vacation rentals.

Monday, May 28, 2007

Great Wall of China

Great Wall of China
by: Jeff Anderson

The Great Wall of China as some believed originated as a military fortification against intrusion by tribes on the borders during the earlier Zhou Dynasty. In 770-BC-476BC, the ducal states extended the defense work, and built large structures to prevent the attacks from other states. The Great Wall of China was eventually separated during the Qin Dynasty, which preceded the Zhou Dynasty. The Zhao, Qin, and Yan kingdoms were connected to form a defensive system on the northern border of the country of Emperor, Qin Shi Huang. In 214 BC the building of the Great Wall of China was on its way. The Great Wall of China took as long as ten years to build.

The Great Wall of China took hundreds of thousands of laborers working daily beyond human limitations to construct and build. Many persons that did not work were thrown into the foundation trenches starving from hunger and exposure of the earths changing weathers. The Great Wall of China was then called The Longest Cemetery on Earth. Buried beneath its structure were more than 400,000 persons.

The Great Wall was stretched from Linzhao (eastern part of Gansu Province), in the west to Liaodong (Jilin Province) in the east. The Great Wall of China served as both a defense and symbolized the power of the emperor. The Great Wall of China was partly successful in repelling invading Mongol forces more than a century ago.

The Great Wall of China has more than 300 million trees, and its purpose was to serve as a barrier from the dust storms that swept into China from the Gobi Desert and other low-rainfall areas. The Great Wall of China was dubbed This Great Green Wall. During the 50's, the city of Beijing was beset by 10 to 20 dust storms every spring. Visibility was only half a mile for 30 to 90 hours each month. By the 1970's the storms had reduced resulting in greater visibility at less than ten hours per month. The reduction made work easier for the many laborers.

The Great Wall of China towered China's mountains, plunging to the lower valleys, and marching across burning desert plains. Very cold winds coupled with snowstorms, made it very difficult for workers. At the same time raging desert sun and stinging sandstorms oppressed the workers, making their jobs difficult, and often risky.

Today the Great Wall of China is a captivation for tourists around the world.

About The Author

Jeff Anderson knows about China. He knows what to look for and what pitfalls to avoid. Let him guide you to finding out more about China. Contact him at Jeff@culchina.com or visit the blog at his site www.culchina.com.

Sunday, May 27, 2007

Visit Hawaii for a change

Coconut tree in HawaiiChina can be chilly in the autumn and winter months. China has also done very well for itself in the past few years. I think China's residents deserve a break and enjoy some luxury with a visit to warm, tropical Hawaii. Well to do Chinese can book luxury accommodation at Hawaii luxury accommodations. Currently, there are 350 of them for you to chose from.

Other reasons why Chinese residents should visit is China has connections with Hawaii. Hawaii was populated by 3 waves of arrivals - first the Polynesians, then the Europeans followed by the Chinese who were serving on European trading ships. These Chinese disembarked and settled in Hawaii in 1789. Also, it has been found that 1.92% of Hawaiian residents speak Chinese at home. Hawaii also have active sister state program with People's Republic of China, Guangdong, (1985), People's Republic of China Hainan, (1992), People's Republic of China Tianjin, (2002) and Republic of China Taiwan, (1993). Chinese can also be proud of Hiram Fong, the first Chinese American and Asian American elected United States Senator. Who knows what surprises awaits you in Hawaii. For all you know, you may meet a long lost relative when you visit Hawaii.

If luxury accommodations are not what you are seeking, you can also go for Hawaii hotels (currently 1030 of them for you to chose from), Hawaii Condominiums (1179 to chose from) or Hawaii vacation rentals (620 of them).

Activities you can participate in in Hawaii include enjoying luaus (a traditional Hawaiian freest featuring roast pig), snorkelling and scuba diving to see a superb varieties of tropical fish and reefs, horseback rides, parasailing, volcano bike tours, even submarine rides!

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Sunday, April 1, 2007

MP4 Player Wholesalers - Finding Quality Products And Suppliers In China

MP4 Player Wholesalers - Finding Quality Products And Suppliers In China
by: Rose Lee

Importing electronic devices from China and other Asian countries is a very profitable business and lately the number of MP4 player wholesalers has skyrocketed. Why? Well, first of all because the largest consumer of electronic goods, the US market, is getting ready for the next step in portable entertainment – MP4 players. The second reason for this new interest in MP4 player wholesalers and MP4 imports is that early product sampling and negotiations with the wholesaler could give US vendors and edge when the customers come rushing in to purchase MP4 players. You can checkout some of the newest MP4 models direct from China here: http://www.chinavasion.com/index.php/cName/mp4-players/

MP4 player samples

Although MP4 technology is fairly new, there are already dozens of MP4 video player manufacturers. One of the best ways to determine how valuable their product is and how reliable your business partner proves to be is by requesting samples of their products. Of course, there is no written rule for this process, and in most cases this will have to be negotiated on an individual basis. Small US-based vendors may have a hard time receiving free samples from different Chinese manufacturers and other MP4 player wholesalers. In such cases, it is up to the US vendor to decide whether they want to make a small investment and purchase several units or if they wish to sit back and watch how the market is evolving.

What to look for in a MP4 player product?

One of the key elements to reaching a wide and highly targeted consumer market is to anticipate their preference for the new products. In other words, you should not import tens of thousands of cheap and low-quality MP4 players if the public is looking for higher prices but better features and image quality.

Here are some features of a top quality MP4 player that should appeal to a large audience:

• Memory: Built-in 1.8 inches 20GB Hard Disc, for example, would give you large capacity for storing whole movies in high resolution.
• Connection: USB 2.0 for faster transfer speed.
• Video playing: MPEG-4 format including DivX.
• Resolution: QCIF/CIF/1/2D/2/3D and D1
• Music Playing: MP3 / WMA formats
• TV Recording: AV input / Video record
• Picture format: JPEG and GIF
• Internal power: rechargeable lithium ion battery
• Acceptable battery time: Video - 3 hours, Audio - 5 hours
• Accessories: USB cable, stereo earphones, installation CD, charger

Finding a reliable wholesaler

As with any type of business, you want to make sure that your business partner is reliable and trustworthy. For retailers looking for an overseas partner and an import business, the best solution is to go with a reputable supplier of MP4 players. While determining “reputation” is difficult, you should look for customer feedback, check out their website and definitely give them a call. A very well known source you can find is this chinese wholesaler: www.chinavasion.com

You should be looking at China in particular for the lowest wholesale prices for MP4 and MP3 players. That's where they are all made these days. Professional MP4 player wholesalers located in China will always have an English translator ready to assist you and provide you with more details. Make sure to ask for samples and clarify all import transactions properly before you sign any contract. It is also advisable to consult other retailers and electronic product vendors to see who they partnered with in their business.

About The Author
Rose Lee is a member of Chinavasion Wholesale Ltd for China MP4 Player Wholesale. To get access to real-time prices for wholesale electronics direct from China, register now for free at www.chinavasion.com.

Sunday, March 25, 2007

Establishing A Representative Office In China

Establishing A Representative Office In China
by: Hal Lightning

Among foreign investors, the most popular form of business establishment in China is the Representative Office. Its main attraction is that it is simpler and cheaper to establish than either a Joint Venture of a Wholly Foreign Owned Enterprise – since no Registered Capital is required, startup costs are roughly 10% of the cost of establishing either of these. Representative Offices are also open to almost all industry sectors, including some sectors that are off-limits to Joint Ventures and Wholly Foreign Owned Enterprises. Furthermore, the Chief Representative need not reside in China. However, Representative Offices are very limited in the activities that they may carry out.

Why do foreign companies establish Representative Offices in China?

1. To conduct preliminary research before deciding whether or not to make a direct investment in China.

2. To provide data and promotional materials to potential partners and/or clients.

3. To coordinate the activities of its parent company in China.

4. To make travel arrangements for representatives of its parent company or Chinese clients or potential clients.

5. A foreign company might already be doing business with China from overseas but lack the market penetration to justify a full-blown investment (some of these Representative Offices later upgrade to Wholly Foreign Owned Enterprises, Cooperative Joint Ventures, and Equity Joint Ventures. Note that in certain industries such as insurance and finance there are sectors that require foreign investors to operate a Representative Office for at least 2 years before making a direct investment.

6. To hire local employees to help them find suppliers.

7. As a cheap and simple way of doing business in China by exceeding its legal scope of business. This is not a good idea because it is likely to get the company in trouble with the authorities.

8. To establish a presence in a business sector currently forbidden to direct foreign investment with a view to getting to know the market in anticipation that China will liberalize its regulations in the future in line with its WTO commitments.

Representative Offices are generally allowed to:

* lease office space and arrange for utilities
* purchase office supplies
* coordinate the issuance of work permits and visas for foreign employees
* open and maintain bank accounts in local currency and foreign exchange
* display office signs and distribute promotional materials
* hire local staff though labor service organizations (this requirement might be partially lifted if the draft Labor Contract Law goes into effect.

Taxation of Representative Offices

Although a Representative Office may not engage in profit-making activities and cannot receive income, it is still somehow subject to taxation under certain circumstances (usually on a deemed profit basis)

Two types of taxes are generally applicable to Representative Offices are Enterprise Income Tax and Business Tax. It may be subject to taxation, for example, when it acts as business liaison for a transaction that generates commissions. The Enterprise Income Tax rate applicable to Representative Offices is 33% (inclusive of a 3% local surcharge). Fortunately, however, the business activities of a Representative Office can be exempted under certain circumstances, although these exemptions vary from industry to industry.

Representative Offices are required to pay value added tax (VAT), consumption tax, and customs duties on any domestic purchases and/or imported equipment, as well as stamp duties (usually a negligible sum). The Representative Office need not pay property-related taxes for leased office space, so don’t let your landlord convince you otherwise.

Legal Status of a Representative Office

A Representative Office is not considered an independent legal entity but rather an extension of its parent company. Accordingly, the parent company must bear all of the Representative Office’s legal liabilities and debts. The foreign company should carefully safeguard the Representative Office’s financial and corporate seals to ensure that they are not misused.

The authority of the Chief Representative is governed not by Chinese foreign investment law, but rather by the foreign parent company’s jurisdiction of incorporation. However, the parent company is still subject to the jurisdiction of the local Chinese courts with respect to all contractual issues, including property rights.

Establishment Procedures

Only one Representative Office may be established in each Chinese city. Set-up is accomplished in 4 steps:

1. Pre-approval Procedure - The foreign parent company must first locate a Chinese sponsor to help it obtain the required approval and registration. This can usually be done with the help of the local Ministry of Commerce (MOFCOM) office, which will introduce the foreign parent company to a designated agent (a Foreign Enterprise Service Company, a/k/a FESCO) that is licensed by MOFCOM to handle foreign Representative Office applications. The sponsor will charge a fee of approximately US$800 - $1,000 for notifying the foreign company of upcoming deadlines and any problems with the application materials. The foreign company will also be required to enter into a lease for ‘Grade A’ office space prior to approval, because a signed lease agreement is one of the prerequisites for approval of the Representative Office.

2. Application – The Representative Office application and supporting documents should be submitted to the appropriate examination and approval authority. The examination and approval authority for a Representative Office will normally be MOFCOM, but foreign companies in certain industries such as banking, insurance, law, accounting and media will need to apply to the authority with jurisdiction over the foreign company’s particular industry. If the application is approved, a Certificate of Approval will be issued by the examination and approval authority, usually for an extendable initial term of 3 years.

3. Registration – Registration must be completed within 30 days after the certificate of approval is issued. An application (together with supporting documents; see this site’s section on “Documentation” under “Rep Offices” for details) is submitted to the local branch of the State Administration of Industry & Commerce (SAIC). This process normally takes 1-2 months and concludes with the issuance of a Certificate of Registration (similar to a business license), which must be renewed annually. Any subsequent change must be registered with the local SAIC.

4. Post-Registration Procedures – The new Representative Office is expected to register its location with the local Public Security Bureau (the police), make financial and corporate seals, open a foreign exchange bank account, register with the local and national tax bureaus, complete customs registration (in order to import office equipment and daily necessities for its staff), and register with a FESCO to recruit Chinese staff. The Chief Representative should apply for and receive a Residence Permit from the Public Security Bureau with jurisdiction over his/her residence (see this site’s section on “Foreign Staff” under “Labor” for further detail)..

Only after completing the foregoing procedures may a Representative Office begin operations. Registration must precede even preliminary activities such as distributing business cards, establishing direct telecommunications lines, and obtaining a multiple entry visa or an apartment for the Chief Representative (the latter requires the Chief Representative’s Residence Permit).

Closing Down a Representative Office – This can be a lengthy process if it is not handled correctly. This is especially so if the office was not originally established entirely in accordance with Chinese foreign investment law but rather through back-door connections (a common occurrence among China’s more experienced foreign investors). China’s legal system is becoming more and more transparent and administrative bodies are increasingly actually enforcing the law, so it’s a good idea to do things the right way the first time. There are several steps required to close down an office – don’t just walk away, especially if you have (or think you might have) long-term plans in the China market.

First, various documents need to be prepared and provided to the relevant authorities. A cancellation form needs to be submitted to the Industrial & Commercial Bureau, and a detailed explanation needs to be provided as to why the office is closing. Application must also be made to the local Commission of Foreign Trade & Economic Cooperation (COFTEC). Both the Representative Office manager and the general manage of the parent company must sign the form. A separate application also needs to be made on parent company letterhead and stamped with its company seal. There must also be a board resolution that agrees to the closure of the office (a statement indicating that the office is to be closed signed by the chairman of the board of the parent company is sometimes accepted).

Further, the bank must provide a notice that confirms cancellation of the Representative Office’s bank account. Tax payment certificates and receipts from national and local tax bureaus must also be furnished to the Representative Office’s original examination and approval authority along with a brief statement about the settlement of debits and credits. The tax bureau will require the closure audit report to be approved by a certified public accounting firm. The corporate seal, financial seal, and the business license must be surrendered to the Industrial & Commercial Bureau. If all the necessary documents are provided and taxes have been paid, the closure procedure should take roughly 2 weeks.

About The Author
David Carnes is licensed to practice law in California. He speaks and reads Mandarin Chinese and has several years experience working with Chinese law firms and Sino-American joint ventures. Check out his website, China Legal Bulletin, at www.lunaticwisdom.com/blog1.

Saturday, March 24, 2007

Intellectual Property Protection In China

Intellectual Property Protection In China
by: David Carnes

If imitation is indeed the sincerest form of flattery, then the Chinese can be very sincere flatterers indeed. But if you prefer prosperity over flattery it would be wise to take precautions against losing your shirt (or at least the rights to it) in one of the world’s most dangerous IP jungles. It isn’t that the legal regime is deficient – it’s enforcement that’s lacking. For the present at least, China is a net importer of intellectual property. A relatively lawless IP environment is advantageous to China’s short-term interests, just as a strictly enforced IP environment suits the interests of net IP exporters such as the United States. This issue has been constant irritant in relations between China and Western nations, as well as Japan. Nevertheless, China’s enforcement of intellectual property has steadily improved in recent years.

Protecting intellectual property (IP) in China requires a multi-pronged strategy including registration, workplace security, employee contracts, commercial contracts and enforcement.


China’s IP registration regimes are more or less consistent with international standards.

Trademarks - are protected on a first-to-file basis, with an exception for well-known trademarks. Do not rely on the “well-known” exception, however (unless you are Coca-Cola), because whether a particular trademark is “well-known” or not is a time-consuming argument that keeps IP lawyers in business all over the world. If a trademark uses words, the Chinese language equivalent should also be registered.

China has adopted the international Classification of Goods and Services under the Nice Agreement, and has also adopted the international registration regime under the Madrid system.

FIE Business Names – must be in Chinese and registered with the local Administration of Industry and Commerce before an application to set up a Foreign Invested Enterprise can be submitted (see this site’s Company Startup Guide for details on company name registration). Since China does not have a national register of business names, registrations are valid only within a particular locality (and an FIE business name cannot be registered in any location except its location of establishment). Trademark registrations offer better protection in this respect.

Patents & Designs - are protected on a first-to-file basis. China is a member of the Paris Convention, so filings in a member country within applicable time limits can also gain priority in China. More ominously, compulsory licenses may be granted (i) to qualified enterprises if the owner of the patent fails to license the patent on reasonable terms, and (ii) in the event of a national emergency. Because of this, many foreign companies do not register patents for sensitive technology in China. See Technology Transfers and Licensing for related information.

Copyrights - Copyrighted material may be registered with the China National Copyright Administration. As in the United States, copyrights are not granted on a first-to-file basis. Registration does serves as useful evidence of ownership of a copyrighted work, but it is not a legal precondition to enforcement.

Software – is considered copyrighted material and may be registered with the China National Copyright Administration. Registration requires the filing of source code (with some code blacked out). As a consequence, many foreign companies refuse to register their software in China.

Domain Names - are protected on a “first-to-file” basis. A foreign company must have an FIE or Representative Office in order to register a “.cn” domain name in China.

Workplace Security

It is strongly advised to create a “plumbing” system to control IP leakage in the workplace.

IT systems and any hard copies of IP should be kept in an access-restricted, secure location.

Confidential information should be distributed on a strict “need to know” basis.

Confidential material should be marked “Confidential Information” in Chinese in anticipation of possible litigation in Chinese courts.


Independently investigate the reputation and trustworthiness of applicants for sensitive positions during the recruitment process.

Labor contracts should be prepared carefully. You should consider including the following in all labor contracts:

Confidentiality obligations

Non-compete clauses - Post-termination non-competition clauses should be limited to a reasonable geographic area and time limit. Compensation is also required to be paid during the period of non-competition.

Assignment – Although China recognizes the work-for-hire principle, the labor contract should clearly assign ownership of intellectual property created in the course of employment; otherwise IP rights may prove practically impossible to enforce against an employee who creates an IP-related work for hire.

Product Selection

Despite the additional tax breaks and incentives available, think carefully before manufacturing products that require new and sensitive technology in China. Components requiring new and sensitive technology may be imported into China in a secure manner for integration with the rest of the product.

Commercial Contracts

Since many commercial arrangements, even sourcing materials and components, can necessitate an exchange of intellectual property, adequate protections should be included in the contracts and associated documentation.

Administrative Enforcement Action

Various government organs have the power to take administrative action against IP infringers:

National Copyright Administration - The NCA is the “big gun” of the Chinese IP enforcement arsenal and is endowed with broad enforcement powers. They may order cessation of the infringing activities, confiscate illegal income, confiscate and destroy illegal copies, and impose fines.

State Administration of Industry and Commerce - The SAIC and its local AICs have a reputation for efficient trademark enforcement action, including investigations and raids. The SAIC also handles disputes regarding business names, registered trademarks, trade secrets, and passing off activities.

Customs - may confiscate products that infringe trademarks, copyrights and patents.

China Patent Office - may help with patent enforcement through investigation, mediation and raids.

General Administration of Quality Supervision, Inspection and Quarantine - may get involved if product quality and health issues are at issue.

Administrative enforcement is a relatively inexpensive and efficient alternative to litigation, and it is easier to win a conviction.


If administrative action fails to bring the desired result, litigation may have to be resorted to. Chinese courts can issue injunctions and award damages, although in practice their enforcement powers are typically weaker than in Western nations.

Criminal Prosecution

Criminal liability, including imprisonment, can be imposed for IP violations, although successful prosecutions are rare. Financial thresholds that must be met before criminal liability can be assessed can be difficult to prove. These thresholds include:

RMB50,000 turnover for knowingly selling goods with counterfeit registered trademarks

RMB50,000 turnover or RMB30,000 profits if trademarks are applied to goods without authorization

International Enforcement

Products that infringe intellectual property rights can be interdicted by customs at the destination port. It is also possible to seize the overseas assets of infringers located in China.

Technology Transfers and Licensing

Foreign investors often license technology and intellectual property such as trademarks, patents, copyrighted material and trademarks to the FIEs they invest in. A foreign party may also license technology to unaffiliated Chinese companies, such as in manufacturing or management contracts. Unlike joint venture contracts, licensing contracts can be governed by foreign law.

Proper licensing will help the foreign party control its technology and secure the payment of royalties (registration is required for the latter). Only the brave, however, will dare to license sensitive technology to an entity which the foreign party does not control.

Technology transfers are understandably less common than licensing and are usually used as part of the foreign investor’s contribution of technology to a Foreign Invested Enterprise as Registered Capital.

Technology Restrictions

Chinese foreign trade law recognizes three categories of technology: Permitted, Restricted, and Prohibited. These are contained in a catalogue that lists specific technologies.

Permitted technology is simply technology which has not been classified as Restricted or Prohibited.

Restricted technology may not be imported without a license, and is generally related to the chemical, petrochemical, biochemical, biological, and petroleum refining industries.

Prohibited Technology is technology that is considered to endanger national security, the public interest, or public morals by placing people’s lives or health at risk or destroying the environment.


A license for restricted technology must be approved by and registered with the Commission of Foreign Trade and Economic Cooperation (COFTEC). COFTEC will adjudicate a license application within 30 days. Licensing contracts for Restricted technology are effective only after COFTEC issues the corresponding Technology Import License.

Prohibited technology may not be brought into China.

Certain types of Permitted technology, while not subject to licensing requirements, are still subject to filing with COFTEC.

Technology transfers relating to certain major projects must be registered with and approved by the Ministry of Commerce. Trademark licenses must be filed with the China Trademark Office within three months of execution in order to remit royalties out of China. Foreign trademarks must be recorded at the China Trademark Office in order to remit royalties out of China. Trademark recordation takes about a year and a half.


A foreign company may not prohibit a licensee from improving the licensed Technology, and these improvements become the property of the improver.

Technology as FIE Capital Contributions

Technology may be contributed as part of an FIE’s Registered Capital; however, the FIE will then become the owner of the technology and the foreign contributor will have to license the technology from the FIE if it wants to use it.

Technology contributed as capital is required to be appraised upon importation and should also be appraised by the Ministry of Commerce or the relevant local COFTEC as soon as the FIE is approved.

Since the Company Law requires 30% of the Registered Capital of an FIE to be contributed in currency (20% of the initial installment of Registered Capital), it follows that alternative forms of contribution, including technology, cannot total more than 70% and 80%, respectively.

About The Author
David Carnes is licensed to practice law in California. He speaks and reads Mandarin Chinese and has several years experience working with Chinese law firms and Sino-American joint ventures. His website, China Legal Bulletin, is at www.lunaticwisdom.com/blog1.