Doing Business in China: A Legal Reading List – Sept 2011

For your reference, a roundup of recent China-focused business updates from lawyers and law firms on JD Supra:

Conducting Clinical Trials in China Requires Compliance at Home and Abroad (Snell & Wilmer L.L.P.):

“China has been home to more than 1,800 clinical trials of pharmaceuticals intended for U.S. use. With its large and growing English-speaking population, the country, along with India, is a foreign clinical trial destination poised to eclipse all the others, according to recent coverage in Vanity Fair. The country is at the forefront of a larger trend in moving clinical trials abroad—in 2008, 80 percent of new drug applications to the U.S. Food and Drug Administration (FDA) contained data from foreign clinical trials.” Read more»

The Law on Foreigners’ Participation in Social Insurance in China Will Become Effective on Oct. 15, 2011 (Davis Wright Tremaine LLP):

“According to the Interim Measures, foreigners who are employed by any entity in China are required to participate in basic pension insurance, basis medical insurance, work-related injury insurance, unemployment insurance, and maternity insurance. Employers and foreign employees must pay social insurance contributions in accordance with relevant regulations.” Read more»

Chinese Version of the Foreign Corrupt Practices Act? (Snell & Wilmer L.L.P.):

“In May 2011, an amendment to the Chinese Criminal Law took effect that criminalizes paying bribes to foreign government officials and officials of international public organizations. The amendment … is modeled after the United Nations Convention Against Corruption…” Read more»

Foreign Pharmaceutical Companies (McDermott Will & Emery):

“Following the State Food and Drug Administration (FDA)’s notice,’Enhancing Regulations for Domestic Processing and Manufacturing for Foreign Pharmaceutical Companies,’ the Shanghai FDA enacted its own regulations for Shanghai contract manufacturers of foreign pharmaceutical companies to ensure pharmaceuticals that are contract manufactured in China meet the drug standards of the United States.” Read more»

Shanghai Food and Drug Administration Issues Regulation for Domestic Processing and Manufacturing of Financing of Subsidiary Operations in China (Peter Chen):

“The article examines the complexity of obtaining permission from the Chinese government to bring funds into the country for investment and financing purposes.” Read more»

Life Sciences Health Industry China Briefing (Reed Smith):

“… business, regulatory and legal developments during August 2011 in China important for drug, device, and life science/health care companies.” Read more»

China Under the Microscope: The Role of CFIUS in Chinese Acquisitions of U.S. Assets (Snell & Wilmer L.L.P.):

“Any foreign investor’s plans to acquire U.S. companies, including their technology, strategic natural resources and defense-related assets are subject to review by the Committee on Foreign Investment in the United States (CFIUS). At the present time, it is fair to say that there is a particular sensitivity at CFIUS to the Chinese acquisition of strategic U.S. assets.” Read more»

Imported Chinese Litigation Returned To Sender (Dechert LLP):

“The question posed was whether the Chinese legal system had modernized sufficiently that, to what the Chinese might have characterized forty-some years ago as an ‘imperialist running dog’ court, it would now be considered an “adequate forum.’” Read more»

Defending Valuations for Equity Transfers of Chinese Enterprises: the intersection of transfer pricing and business valuation analyses (Peter Chen):

“As highlighted by recent events outlined in this article, transfers of shares of Chinese enterprises at cost are unlikely to be accepted by tax authorities moving forward. Consistent with the arm’s length principle that guides Chinese tax authorities’ administration of intercompany pricing, most equity transfers should now be priced in a manner consistent with the fair value of the subject shares.” Read more»

China Accounting Analysis: The Strange Phenomenon of “Negative Goodwill” (Barry Epstein):

“Recent news story about the “negative goodwill” accounting by China Yurun Food Group may arouse new interest in the arcane accounting concepts of goodwill and the less frequently cited negative goodwill. As these are often misperceived even by sophisticated preparers and users of financial statements, they deserve explanation.” Read more»

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