1. Foreign Companies Are Leaving China

Foreign companies are tiring of the difficulties and the risks that come from doing business in China. Not surpisingly, our China lawyers have been getting a ton of questions on how to close a China WFOE.

It is difficult and time-consuming to form a WFOE in China. As you might expect, the procedure for shutting down a WFOE is also subject to formal procedures and regulations. You cannot simply abandon your company; PRC law requires a formal de-registration procedure be followed for the shutting down of all companies. The most important part of this de-registration process is a formal liquidation of the company, similar to a Chapter 7 bankruptcy proceeding under U.S. law. Many foreign investors figure they have already suffered enough from Chinese bureaucracy, so they avoid this formal process and simply abandon their WFOE. In taking this course of inaction, they assume

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I previously described the case:

Twitter suspended Huber pursuant to its COVID misinformation policy. Huber claimed that Twitter took that action in league with the Biden administration. If this setup sounds familiar, that’s because at least a dozen cases riff on this theme. This case had two minor twists. First, this wasn’t a typical pro se suit; actual licensed lawyers were involved. Second, the lawyers could echo Prof. Eugene Volokh’s blog post that was endorsed by Justice Thomas. Despite these advantages, the result was the same as all the others–motion to dismiss granted.

In the wake of its dismissal of another jawboning case last month, the Ninth Circuit breezily rejects Huber’s appeal in a very brief memorandum opinion showing how poorly the plaintiff’s arguments resonated with the judges:

  • “the complaint does not contain any nonconclusory allegations plausibly showing an agreement between Twitter and the government to violate her constitutional rights.
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One of our oldest and most cherished traditions is to write about China scams at the end of every year. We do this because history shows this is the biggest month for them.

Scammers increase their activities at the end of the year, hoping to be less noticed/less examined due to the usual end of the season rush.  I was reminded of this tradition after reading my emails this morning and getting hit with what look like a couple new fraud matters from companies scammed by China, and a number of people who got scammed, including one person — and I kid you not — who revealed that he had been scammed four times this year by Chinese companies. I do have to give the scammers credit in that the diversity and ingenuity and number of scams is way up as well.

This has been an impressive year for scams

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Green trademarks are running into red lights in China. Just about every application to register a mark that includes the word “green” is being rejected. Rumor has it that concerns over greenwashing are to blame, though given the opaque nature of the application process this cannot be confirmed.

Greenwashing is the “practice of making unwarranted or overblown claims of sustainability or environmental friendliness in an attempt to gain market share.” The use of words such as “green”, “eco” and “sustainable” to describe products that are not in fact environment-friendly can be considered a form of greenwashing.

China’s Trademark Law prohibits the registration of deceptive trademarks. A trademark that greenwashes the underlying products can be considered deceptive. We suspect that deceptiveness concerns are behind the many rejections of green trademarks and these suspicions are shared by practitioners in China.

Contrary to the practice in the United States, the China National Intellectual

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