April 2009

Last week, I received an email from an American attorney, whose client encountered some problems concerning their insurance policy, a policy purchased from two Chinese Insurance Companies. In his email, he informed me that after the occurrence of an accident which was suppose to be covered in the insurance policy, the Chinese Insurance Companies refused to compensate his client. The insurer and the insured had different understandings of the policy clause. He wanted to know whether his client could seek help from the CIRC and if so, how they should go about doing so in China. In his email, some provisions in the Guideline of the Management of the Insurance Company issued by CIRC were quoted to inform me the CIRC functioned similar to the SEC in the US. I informed him the CIRC could not help, his client should bring this case to court or if there is an arbitration clause in the policy, the dispute could be arbitrated in the arbitration commission agreed by the parties.

Continue Reading The CIRC and Its Local Offices: Functions and Responsibilities

1. The dilemma in the contractual cooperation between banks and insurance companies

Generally speaking, the mode of mixed operation is still under exploration and the driving force mainly originates from the spontaneous market.

The cooperation between banks and the insurance sector remains on the level of contractual agreement between insurance companies and banks. Such cooperation only involves certain activities in which banks conduct the following for insurance companies; charging insurance premiums, disbursing insurance amounts and selling insurance products.
 Continue Reading Institutional defects of China divided operation

The first issue faced by SAIC (State Administration for Industry and Trade) is retaining an appropriate degree of manpower. According to the permission from State Council, SAIC has established a specific bureau to cope with monopoly behavior, though its manpower is far from adequate to deal with nationwide AML cases. Based on the provisions of the AML, SAIC may empower its subsidiaries at the provincial level in order to help resolve specific cases. This means SAIC can take advantage of nationwide resources under the present system. However, the question of how to prevent localism and how to guarantee strict compliance with the AML presents a challenging answer.

Continue Reading China’s SAIC Faces New AML Hurdles

Recently, in the Fifth High-Level Forum of China’s Financial Reform, supervisory and regulatory officials from departments such as the CIRC, CSRC, CBRC, People’s Bank of China and Ministry of Finance, indicated the CIRC and CBRC have reached consensus on a pilot investment project. The project will concern investment in the insurance industry by 4 large banks allowing for some breakthrough in the Mixed Management of Banking Industry in China.

Continue Reading Chinese Banks Attempt to Invest in the Insurance Industry

On March 4th 2009, attorney Zhou Ze filed a claim in Beijing Dongcheng District Court. He accused China Mobile and Beijing Mobile of abusing their dominant market position (DMP) and price discrimination. The court has accepted the case and the hearing will be in the near future. For China mobile, the largest domestic mobile phone operator and the world’s largest operator by subscribers, it is the first time an Anti-monopoly suit has been brought against the company.

Continue Reading China Mobile under Anti-monopoly Law Suit

When referring to the anti-monopoly authority in China, many first mention the Ministry of Commerce of the People’s Republic of China (MOFCOM). However, based on the provisions of the Anti-monopoly Law of the PRC (AML) and the power allocated by the State Council, the State Administration for Industry and Commerce (SAIC) will play a primary role in AML enforcement.

Continue Reading China’s SAIC and the Enforcement of the AML

With the rapid growth of the Chinese economy, international business between foreign companies and Chinese companies is commonplace. The presence of dispute is inevitable. Should a commercial dispute arise concerning international trade in China, there is enormous potential for complex legal problems to arise. For example, the party may suffer a large loss; and questions arise as to where in China the lawsuit should be brought and whether a judgment is binding. Parties need to know whether their rights will be protected. Arbitration presents itself as a practical alternative to the traditional mode of courts.

Continue Reading Arbitration in China: Benefits of an Arbitration Clause

Since the Ministry of Commerce (MOFCOM) promulgated its decision to block the acquisition of Huiyuan Juice Group by The Coca-Cola Company, the decision has been subject to tremendous criticism from trade lawyers and economists. Some have argued China appears willing to wield its Anti-monopoly Law to fend off foreign attempts at buying promising domestic firms (though Huiyuan was incorporated in the Cayman Islands), even when the resulting market concentration would not be excessive.

Continue Reading Coca-Cola & Huiyuan: Explanation, Theory, An attempt to Rationalize?