Showing 118 posts by Joseph J. Dehner.
Compliance with Transfer Pricing Rules - A new way to bridge differences between the IRS and Customs –
Multinational companies face compliance challenges and spend substantial time and money on transfer pricing issues. Transfer pricing arises as an issue when affiliated entities within a business enterprise buy or sell goods or services between them. Major car makers, for example, have many subsidiaries and affiliates throughout the world. They ship parts from one affiliate to another through a supply chain that produces an assembled vehicle. To use a hypothetical, when a Chinese subsidiary ships a gear box to its parent company’s US assembly plant, this is a purchase/sale transaction between affiliates. Two major governmental issues arise when this happens – taxes and Customs duties. Read More ›
Blocking “Unfair Competition” from China - A new weapon for US Industry
US manufacturers have home-turf protection through Section 337 of the 1930 Tariff Act. Enacted during the depts. Of the Great Depression, §337 has survived, while punitive tariff rates and many other protectionist provisions have been repealed. As the United States changed from a fenced-in economy to a leader in freer-trade thinking, it kept §337. Read More ›
China and Securities Regulation-- It’s getting tougher
China’s securities markets have blossomed like cherry trees in a Washington springtime, or like kudzu along interstates – depending on your viewpoint. The growth in publicly traded securities in China since the early 1980’s has been an enormous achievement of the great transition since the times of Mao. With success come fraudsters, tipsters and the other miscreants that Wall Street has encountered since its creation.
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New Taxes on Foreign Companies Another Challenge to Profitability in China
Some veterans of trying to make Chinese operations profitable call it death by a thousand cuts. No one stab kills profitability. But the sum of mini-wounds can be financially fatal or coma inducing. Read More ›
China’s Trade Flows Not just a matter of Currency Manipulation
Increasingly bipartisan pressure in the US is building to force China to increase the value of its currency. Senators Chuck Schumer, Sherrod Brown and others say that the RMB is undervalued by 25-40% or more, and that if it were allowed to float freely, US exporters would benefit. An implication of this thinking is that our trade deficit with China would be brought into balance. Read More ›
Internationalization of the RMB - The Hong Kong Bridge – The Pace Increases -
US companies with operations in China deal in RMB and USD. US companies that import from or export to China face currency risk in their pricing. Were the same dealings conducted with European, Canadian or many other countries with convertible currencies, the customary range of financial planning and foreign exchange options are available. But with the RMB it’s more complex – and more expensive and tricky. Read More ›
Manufacturing Expansion, Legal Update and VAT News
At the July 20 quarterly webcast of Frost Brown Todd, Grant Thornton and East West Consulting, presenters covered a range of update information for US companies active in China. The challenges of operating, expanding and populating a profitable manufacturing operation were discussed in detail, with a helpful checklist of considerations to increase the odds of financial success provided. Legal updates were provided about employment (including for expats), intellectual property, national security review, national treatment, currency/inflation, tort liability and arbitration. A review of VAT and other taxes that apply to entity reorganizations concluded the session. Read More ›
The End of an Era: Inflation and China’s Evolution as a Medium-priced Manufacturing Center
China is no longer “the cheap place to make things.” Does that overstate the reality? This is a debate, not a settled point. But many signs point to the end of the era when non-Chinese companies moved manufacturing operations to China in order to supply the world. Today’s international executives are more likely to see China as the source to supply China, and perhaps other parts of Asia, rather than the center of manufacturing or sourcing of their key goods. Read More ›
Update on Chinese Employment Law and Practices
China’s employment rules are changing as quickly as the Chinese landscape. With a Labor Code only a few years old, there are major issues to be addressed, and the tax and other costs of employing personnel in China undergo frequent adjustments. While China is a unitary legal system, there are great variations among provinces and self-governing cities. Prior recent posts have addressed many of these emerging issues, including minimum wage levels, add-ons to employee compensation. The following is a summary of developments in the first half of 2011 that affect Chinese employers, and will be of particular interest to US companies with Chinese operations. Read More ›
The Yuan creeps towards world currency status
Prior posts have discussed how the Chinese currency is inexorably moving towards becoming a world currency. Although convertibility is not imminent, a parade of steps continues in that direction. In late April 2011, the Export-Import Bank of China (China Exim) announced another example of the yuan’s march towards acceptance as a world currency – not a reserve unit, but a monetary device useful outside of China. Read More ›
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Attorney Spotlight
Joseph J. Dehner Joe Dehner concentrates his practice on multinational business and securities disputes. He counsels a wide variety of companies, domestic and foreign, on issues confronting global business, including transnational investment, mergers and acquisitions, joint ventures, customs and trade issues, international business structures, distribution and agency agreements and the resolution of international disputes.