In today's world economy, companies in the United States are looking to the rapidly growing China market as a source of increased revenue potential. Whether it is taking advantage of the vast number of potential customers in China or reacting to the low manufacturing costs in that region, the Asian market offers many opportunities and challenges.
Baker & Daniels has been in the China market since the early 1990s, even before the opening of the firm's first office there in 1998. Our China practice attorneys in Beijing, as well as many in our U.S. offices, are U.S.-educated lawyers who speak Mandarin and Shanghaiese, understand governmental compliance issues and restrictions, and are knowledgeable about the way Chinese companies conduct business.
The ability to "speak the language" is a key factor in helping clients take advantage of the China market or feel secure about their investment in China. Baker & Daniels lawyers counsel clients on many issues, including the following areas:
Protecting Your Intellectual Property in China
Whether you have decided to patent your technology, register a trademark, obtain a copyright or keep your confidential information trade secret, you are rightfully concerned about your ability to protect that valuable asset once you use it or place it into commerce in China. We have helped clients by monitoring Chinese Web sites to identify counterfeiters, shut down manufacturing of counterfeit products and have counterfeit goods seized. In some cases, the counterfeit goods posed safety and product liability problems for our clients, and we had the goods seized to avoid future accidents and the resultant liability. For a list of related experiences, click here.
Competition From Low Cost Producers
Remember the saying: When you can't beat them, join them? Many of our clients have found that due to low manufacturing costs in China they simply cannot compete. So they have established sourcing relationships with Chinese companies and have asked us to assist in conducting due diligence to identify the right Chinese sourcing partner. In other cases, we have helped clients establish manufacturing facilities, either through a joint venture or a Wholly Foreign Owned Enterprise. We have helped form joint ventures for a range of manufacturing clients, including a wood products manufacturer, lawn equipment manufacturer, wire manufacturing company and water supply equipment manufacturer. We have also helped clients restructure the ownership of joint ventures after they were formed. Specifically, we helped a specialty chemical manufacturer. For a list of related experiences, click here.
Entering China Market to Gain Market Share
Selling products into the rapidly growing China market is an opportunity many companies do not want to miss. Whether a company survives could well depend on its ability to meet the needs of this large and constantly changing market. We have helped many companies with their sales, distribution and manufacturing strategy in China — all with the end in mind of selling to new customers in China. One of the clients we counsel — Klipsch Audio Technologies — has grown from being one of the first U.S. loudspeaker companies to becoming a leading global manufacturer of high-performance loudspeakers and other entertainment products, including home theater systems, surround sound, computer speakers, iPod/MP3 speakers, professional cinemas and commercial venues. For a list of related experiences, click here.
Satisfying Customer Demand to Supply in China
Your largest customer has just decided to build a manufacturing plant in China and it wants you to supply it — in China. You are concerned that if the customer establishes a relationship with another Chinese supplier — or worse yet, teaches a Chinese company its exact specifications for your product — you may lose the customer not only for their needs in China, but throughout the world. You know you need to support the customer, but what are the risks, how can you address those risks and are you better off with a Chinese partner or going it alone? We can help you evaluate all the alternatives in light of the ever changing Chinese laws and help you make a decision that fits your company's risk tolerance. For a list of related experiences, click here.
Ensuring Product Safety: Navigating Issues and Avoiding Recalls
The easiest way to avoid a product recall is to set tight contractual specifications up front. But even the tightest contract won't prevent a recall if you never audit or spot check the supplier's products before they are incorporated into your finished product. We can help you establish a prevention program that includes notification of changes in any raw materials used, notification prior to process changes, audits and independent lab testing of products before they are shipped to you or to your customers.
Deciding How Best to Globalize
We can clarify the important business decisions for you, including:
- Assessing the appropriate investment vehicle,
- Whether to enter into a joint venture or establish a Wholly Foreign Owned subsidiary,
- Establishing a holding company structure to be the most tax effective possible, such as avoiding the double taxation that results from dividends being paid to a U.S. company, and
- Deciding whether a Representative Office can legally do all that you need to do in China or whether you need to obtain a Trading License.
We can explain your options in simple terms and help you to decide the best method for you to make your foray into China. For a list of related experiences, click here.
Ensuring Corporate Compliance
If you are a publicly traded company and have Sarbanes Oxley Compliance issues, you understand that you need to ensure that your corporate policies apply globally, and that they are enforced and monitored in China as they are in the U.S. Even if you are not publicly traded, there are compliance issues that arise under the Foreign Corrupt Practices Act that require training and monitoring in China. Helping your Chinese employees understand the U.S. laws or corporate policies with which they must comply is one of our strengths. We literally speak the language of your employees in China and can help them understand the issues. We have helped a variety of clients, including Klipsch Audio Technologies, the specialty chemical division of a Fortune 500 company, an engineering firm, a motor vehicle manufacturer and many others. For a list of related experiences, click here.
Resolving International Disputes
Most international contracts will provide dispute resolution provisions that provide for arbitration in a neutral location such as Singapore, Sweden or other jurisdictions. Our international team includes litigators experienced in international arbitration. We have also negotiated resolutions of complex disputes where the contract is silent on how and where a dispute will be resolved. For a list of related experiences, click here.