In the news: Xi consolidates power, company registration gets easier and Baidu is sued for piracy
November 15, 2013 | BY
clpstaff &clp articles &The Third Plenum has ended with two new organisations announced. The SAIC has vowed to ease company registrations and Baidu has come under attack for online piracy
Two new organisations boost Xi's power
The four day long Third Plenum ended with two new organisations: a Security Council and a new team to push through policies bypassing the government. The Security Council will consider domestic security and foreign security policy. The policy team will report directly to the leadership instead of the government. It is thought by removing the government, policies will be pushed through much faster and not face resistance. The team will be in charge of designing reform on an overall basis, arranging and coordinating reform, pushing forward reform as a whole and supervising the implementation of reform plans, according to Xinhua.
Source: Telegraph
Xi appears to have flexed his muscles and it has worked. This may be one of the biggest overhauls to China's established regime since the People's Republic was founded. The policy team definitely shows that Xi wants his reform policies to be pushed through without interference from the government. Details remain vague at the moment and it will be interesting to see if Xi's dreams materialise in the future.
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Simplifying registration for foreign businesses
Zhang Mao, head of the State Administration for Industry and Commerce (SAIC) said in a press conference this week that when the government lowered the threshold for business startups, foreign business in China should receive the same treatment. On October 25, the State Council noted that it would streamline the company registration process in China. According to a statement from the Council, the minimum registered capital requirement to start a limited liability company, a one-person limited liability company and an incorporated company will be removed.
Source: China Daily
Analysis: China Law Blog
This is definitely a start, but it is only one of the baby steps that the government needs to take on the issue of company registration. Companies are still subject to an industrial investment directory, as Huo Jiangguo, president of the Chinese Academy of International Trade and Economic Cooperation points out in the article: “This new reform is only confined to the company registration area. In fact, most foreign countries have no requirement for 'registered capital' in terms of setting up a new company.” In addition, approvals, forms and procedures create an enormous amount of paperwork for new companies. Until the registration process streamlined – it is still going to be a burdensome process for foreign companies. Check out Dan Harris' article Forming a China WFOE to see all the documentation required.
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Baidu sued for online piracy
Tencent and Sohu have joined a US film industry body in seeking Rmb300 million ($49.2 million) in damages from Baidu and QVOD for copyright violation. Dalian Wanda and the Motion Pictures Association of America (MPAA) have also joined the action. Baidu has said in a statement that it is committed to fighting piracy while QVOD spokeswoman said: “We are just a video player, we don't provide content.”
Source: ALB
This is not the first time Baidu has been in trouble for piracy. Copyright holders have been increasing their efforts over the past two years to ensure that their works are not pirated. Unfortunately, online companies have been profiting from this piracy for too long and if the action is successful, Baidu's and QVOD's advertising revenues may be hit. It is good news for copyright holders as these actions reinforce the fact that there are avenues for them to take action.
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