Articles by Practice Area
By Richard Grams, Consultant, Oldham, Li & Nie.
Gift-giving and hospitality are time-honored traditions within mainland Chinese culture and still play a significant role in cultivating relationships, showing respect and appreciation. However, gift-giving in a business context is usually more nuanced due to the emphasis that Chinese place on hierarchy/social status and concerns about how actions reflect on themselves. Today’s more stringent anti-bribery enforcement climate also complicates business gift-giving in China.
What follows are some guidelines on gift-giving etiquette in Chinese business culture.
- Chinese place great emphasis on symbols and symbolic associations which may not be readily apparent to non-Chinese. Care must be taken in choosing gift items which are regarded as having symbolic significance.
- Give gifts to key business executives you visit, as a way to thank them for meeting you.
- Gifts exchanged in the context of an ongoing negotiation are acceptable but wait until avoid negotiations are finalized before giving gifts to avoid giving the impression that the gift is given for the purpose of influencing the outcome of negotiations.
- Colors carry great symbolism in China. Limit color of wrappings to Red, Gold, Silver and Pink. Colors such as white, blue, black or yellow wrapping with black text printed on should be avoided. To avoid wrapping being torn or creased from travel, wait until you arrive in China before wrapping the item. Speak with hotel staff about nearby gift-wrapping services.
- If giving multiple items, avoid giving 4 of any items as Chinese associate the number with death. The number 6 (六) sounds similar to the character for 'flow' (流), which indicates fluidity and that everything will go smoothly. The number 8 is considered the most auspicious number for the Chinese, mostly because the word 'eight' (八) in Chinese somewhat resembles the word for 'prosperity' or 'wealth' (发). A gift of either 6 or 8 items will be appreciated.
What to Give as Gifts
The ideal gift need not be big or expensive. It should, however, be something that the recipient will appreciate. Keep the following tips in mind:
- A gift that represents where you are from or an item which is not accessible in China will usually be highly appreciated.
- Avoid giving any gift that may regarded as extravagant as this may place undue pressure on the recipient to reciprocate. Reciprocity is a very important facet of Chinese culture and if the recipient feels unable to reciprocate, he/she will usually refuse to accept the gift offered.
- The more practical the gift, the better, as it will serve as an oft-used reminder of you and your thoughtfulness.
Suggested Gift Items:
- A bottle of good or very good wine, cognac or scotch whiskey since apart from the material value these represent, they also symbolize a toast to the good health of the recipient so regarded as very sincere
- A fine pen
- Memorabilia of a sports team near your company’s operations (a jersey with name printed – be careful with the colors)
- A coffee table book on symbolic moments in your country’s history or on wildlife, landscapes or art culture
- Good quality foreign cigarettes or cigars if the intended recipient is a smoker
- A small basket of apples is a popular tradition in China is to give apples especially on Christmas Eve. This is because Christmas Eve is called ‘Ping An Ye’ (平安夜), which sounds similar to the word for apple, and literally translates to ‘Peaceful, Silent Night’
- A leather wallet or other practical local handicraft especially if handcrafted in the country, region or city you are from
Items to avoid giving
- The word for ‘Shoes’in Chinese (鞋) sounds a bit like the Chinese word for ‘evil’‘heretical’(邪). It also giving them the tools to ‘walk away’and could be misinterpreted as you wanting to part ways, thus ending your relationship
- Avoid giving umbrellas, scissors, handkerchiefs or pens containing red ink and avoid signing cards with red ink.
- While most Chinese people would welcome receiving most fruit, especially apples, don’t give pears because the Chinese word for 'pear' (梨) sounds the same as 'to separate' or 'to part from' (离) and might imply that you hope the recipient's family will separate (through death or divorce).
- Flowers are generally fine but if you decide to give these, avoid white ones, especially Chrysanthemums, which are only used when visiting graves or during funerals.
- The Chinese word for 'four' (四) sounds similar to the character for 'death' (死) so avoid giving any item in a set of four.
Proper Etiquette for Giving a Gift
Chinese people believe that the manner in which a gift is given is sometimes worth more than the gift. The most common gift-giving faux pas can be avoided by following the tips below:
- Hierarchy is a treasured concept in China, with people at the higher levels of social strata receiving a great amount of deference. When making a gift to a company or to a group of people within a company, present it to the most senior ranking person in the room.
- In general, to avoid possible embarrassment, give the same type of gift to recipients at the same level within their organization.
- Giving a gift to an individual as a gesture of friendship rather than as a token of appreciation to the group that the recipient represents is usually best done in private.
- Chinese people are typically reserved and your gift is likely to be received with a reserved demeanor particularly if you give it in the presence of the recipient’s staff. Do not take this is a lack of enthusiasm for the gift; the recipient simply does not want to be cast as greedy.
- To avoid appearing greedy, the recipient may decline the gift the first time it is offered. Persist and ask again. It is customary for a gift to be declined up to 3 times before it is accepted so be prepared for this. If the gift has been absolutely refused, do not press on but politely acknowledge the refusal.
- Gifts are usually not unwrapped when they are received so do not be offended if the recipient does not open the gift in front of you. Chinese people do not usually open a gift in front of the giver to avoid possible embarrassment. Instead, a recipient will open it later and then call or write to thank the giver.
- Once the gift is accepted, express your gratitude that they have accepted the gift and proceed from there.
- Wrap gifts well and ensure that the wrapping is presentable before giving a gift. Never present a gift in the store bag the gift was purchased from.
- When presenting a gift, offer it facing the correct way to the recipient and do so with both hands. It signifies that respect and care has been taken. This is similar to the process of exchanging business cards.
- Unless the occasion is symbolic, do not photograph the gift-giving.
Proper Etiquette for Receiving a Gift
The procedure for receiving a gift is similar to that for giving one. Please note:
- You may be expected to initially decline the gift, 3 times customarily, before eventually accepting it and expressing your gratitude.
- When you do accept the gift, take it with both hands. As earlier noted, it symbolizes respect and gratitude for the gift and the thoughtfulness of the person giving it.
- Chinese people who have had previous contact with Americans or other Westerners may expect you to follow the American custom of opening the gift when it is received (ie: in front of the person giving). To avoid confusion, you can always ask, "Would you like me to open this now?
- Call or send a thank-you note. And, if possible, bring a gift of roughly similar value to give the giver on a subsequent occasion.
By Elodie Dellavolta, Foreign Qualified Lawyer
China has its own Intellectual Property (“IP”) rules so you need to learn these quickly!
Here are 10 “Key Rules” to enable you to properly protect your IP in the PRC and so reduce your business risk.
1. Rule No.1: Registration of your Trade Mark in your country of origin gives you no similar Protection in the PRC.
Trade Mark rights are territorial and the ownership of a Trade Mark in one country generally provides no advantage when seeking to enforce that Trade Mark in another country. You must register your Trade Mark without delay in the PRC, and ideally within the 6 months of its application in another country, to possibly back date the PRC application.Protection by registration in the PRC does not cover Hong Kong, Taiwan, Macau. So, registration of your Trade Mark in Hong Kong, Taiwan and Macau does not give you any protection in the PRC. You must separately register your Trade Mark in each of those separate legal jurisdictions.
2. Rule No.2: Be the first to file in the PRC. There is no substitute for this.
Unlike in the US where the Law tends to favour the user of a Trade Mark, China’s IP Law favours the first party to file. There is no effective protection without registration in the PRC. Also remember never to rely on others to register your Trade Mark; indeed if another party registers a Trade Mark in its own name, it may even be able to claim against you!
3. Rule No.3: Check your Trade Mark is available for registration and use
Take professional advice on the registrability of your Trade Mark before making any application. Conducting a comprehensive search on the availability of the Trade Mark in the PRC is recommended.
4. Rule No.4: Enforcement of your Trade Mark can only be effected, once your Trade Mark is registered in the PRC.
You don’t have recourse to the different methods of enforcement in the PRC until you actually have a PRC Trade Mark Registration Certificate. However, be aware that the turnaround time to obtain Trade Mark registration in China (PRC) is 12 to 24 months, from application.
If entering into any collaboration with a Chinese partner, do ensure that the relevant contract protects your Trade Mark rights and do ensure that there is a clear written agreement as to who owns what IP.
5. Rule No.5: Registration of your western language Trade Mark does not protect the Chinese character version of the same Trade Mark.
English is still not widely spoken in the PRC and so Chinese consumers often find that a Chinese name is much easier to pronounce and remember. The Chinese characters version of your brand name may have even more value than the original foreign-language name.
If you do not protect the Chinese language version of your Trade Mark, a third party could register such and prevent you from using it, as recently experienced by HERMES, the French luxury brand company, which lost an appeal to trademark the Chinese language version of its name in China.
So, consider filing a translation and or transliteration of your Trade Mark, in addition to its English character version.
6. Rule No.6: Apply for the Trade Mark for your existing goods/services and also for goods/services to be developed over the next 3 years
Note that the protection of your Trade Mark is limited to the relevant goods/services that the registration covers.
The Chinese system divides each 45 international classes of goods/services into subclasses. To efficiently prevent others from registering/using the same or a similar Trade Mark in the PRC without your prior consent, it is very important that the specifications of goods/services under the registered Trade Mark is appropriately sub classed. The Chinese Registrar appreciates the similarity between the goods/services (E.g: protection of a trade mark for “jeans” will not enable you to prohibit registration/use of a similar Trade Mark for “socks” by a third party), since they fall within different sub-classes.
7. Rule No.7: Monitor your Trade Mark
We recommend you to subscribe to a “watch service” so that you receive a report of all similar Trade Marks once advertised.
Also proactively record your Trade Mark with the PRC General Administration of Customs (GAC) to access a 7-years period of PRC Customs protection in the course of the import and export of goods bearing the Trade Mark.
8. Rule No.8: Use your Trade Mark within 3 years of registration
Use your Trade Mark to prevent your right being cancelled for non-use. Ask for our advice to keep your registration alive before it is challenged by a third party.
9. Rule No.9: Protect your Trade Mark through domain name registration under the Chinese top level domain “.cn”
10. Rule No.10: Adjust your Trade Mark licensing agreements to fit into the PRC legal system
Remember, certain clauses of any IP licence may be considered invalid under the Chinese legal system, so again, take legal advice in advance!
IP protection is a critical part of ensuring your business success, so get it right. Mistakes can be time-consuming and expensive to resolve.
IP protection is a complex legal area, so obtain professional advice as early as possible.
For enquiries related to this, please contact Chris Hooley (firstname.lastname@example.org), Vera Sung (email@example.com) or Elodie Dellavolta (firstname.lastname@example.org).
By Richard Healy, Partner.
You may have read recently that the People's Republic of China ("PRC") Ministry of Justice has recently issued a directive requiring lawyers in mainland China to take an oath of loyalty to the Communist Party. Accordingly, all newly admitted lawyers, or lawyers renewing their practicing licences are required to swear an oath of loyalty which includes the following wording:
"I promise to faithfully fulfill the sacred mission of socialism with Chinese characteristics….. be loyal to the motherland its people and to uphold the leadership of the Communist Party of China."
The justification for requiring this oath is that it is supposed to increase the integrity of Chinese lawyers. Whilst that aim seems doubtful, this requirement has drawn criticism from many quarters within China suggesting that it will hinder the development of the Chinese legal system and damage the rule of law in the PRC.
This situation should, however, be contrasted to situation in Hong Kong, which has the status of a Special Administrative Region within the PRC and applies principles of "one country two systems". The Hong Kong rules of professional conduct do not require the taking of any such oath and indeed the fundamental principles of professional practice emphasize the duty to the client as set out in Rule 2 of the Solicitors' Practice Rules:-
"A solicitor shall not, in the course of practicing as a solicitor, do or permit to be done on his behalf anything which compromises or impairs or is likely to compromise or impair-
(a) his independence or integrity;
(b) the freedom of any person to instruct a solicitor of his choice;
(c) his duty to act in the best interest of his client;
(d) his own reputation or the reputation of the profession;
(e) a proper standard of work; or
(f) his duty to the court."
It should also be noted that common law principles that still apply in Hong Kong, including the principle of confidentiality between lawyer and client and legal professional privilege. The directive by the Chinese Ministry of Justice requiring lawyers to swear an oath of loyalty to the Chinese Communist Party perhaps does no more than reiterate what many overseas have long suspected, that mainland Chinese lawyers first and foremost obligation is to the State and the Chinese Communist Party. For this reason many overseas clients prefer to take advice as to their overall strategy and structuring of China operations from Hong Kong lawyers where they know they will receive independent advice based solely upon the client's best interests.
OLN can assist you with PRC matters
OLN is happy to assist you with China related matters. With our team of experienced lawyers and our years of experience in helping our clients strategize and structure deals in China, OLN is able to serve your needs comprehensively.
OLN offers a wide range of services including the establishment and maintenance of business presences in China and all that is associated with such a business.
By Richard Healy, Partner
As one of the world's fastest growing economies, China rapidly become a "hot spot" for foreign investment. However, U.S. companies doing business in China must understand the risk and challenge in terms of US Foreign Corruption Practices Act ("FCPA") compliance.
By Christopher Hooley, Partner
China's Immigration policy is currently under review, with plans for China to introduce its first ever Immigration Law in an effort to control the increasing number of foreigners coming to China to work.
Whilst details of the policy have not yet been released, the Chinese Government has been advised to learn from the experience of other countries in regulating immigration.