1. Stolpersteine und Chancen bei
einer Expansion nach China
Susanne Sahli & Nathan Kaiser
Egerkingen, 9. Juli 2012
www.eigerlaw.com www.truecolours.ch

2. Agenda
• Introduction
• Stories and Anecdotes
• Does law matter in China?
• What are contracts worth in China?
• HR: Success factors as an Expatriate
• HR: Leadership in Greater China

3. Stories and Anecdotes
• two party Joint Venture with three parties
• the eternal, superhuman Joint Venture
• Incentives to come - and to stay!
• your trusted distributor in China
• your independent middle man in China
• SAFE: financing limits that really apply
• recognition of foreign court judgments

4. Stories and Anecdotes
Typical HR Problem Cases
• the local CFO from Germany
• the local GM
• the foreign, very flexible, company in China
• your trusted accountant
• the foreign young business man
• ... and just normal employees...

5. Stories and Anecdotes
The environment is different in China:
• Stock market in China
• Focus on FIE / comparison with local
companies
• Internal fraud – „à la Chinoise“
• Environmental issues – „à la Chinoise“
• Food issues – „à la Chinoise“
• Small customs issues – „à la Chinoise“

6. Stories and Anecdotes
Typical Cases of Fraud:
• Inventory theft
• Accounting fraud
• Fraud at POS
• Kickbacks to suppliers / from customers
• Competing activities
• Breach of confidentiality
• Tax and customs fraud

7. HR Landscape in China
• Cultural and social settings in a rapidly
evolving society
• „guanxi“ as cornerstone of business model?
• Lack of enforcement by judicial apparatus
• Immature HR market: power combined with
low salary
• ... opposite: GM with "no power" but high
salary
• The poker game under the table

8. HR landscape in China
• 18 Mio labor enter workforce every year
• The war and retention for top talent intensifies,
strong headwinds for Caucasians
• Suitably, qualified leaders with fitting values are
hard to find and come at high cost
• Localization of top level positions continues
• Solutions for Executive search, assessments,
talent management, coaching and on boarding
programmes highly in demand

9. Leadership in China demands:
• Understanding of cultural differences
• Ability to look at things from others
person’s perspective
• Being comfortable with uncertainty
• Flair for situational leadership
• Rapid decision making capability
combined with patience
• Robust mentally and physically

10. Expatriate transition:
From an employer’s point of view
• What are selection criteria and do we have a
sound and proper recruitment process in place?
• How do we include spouses and family members
in the process?
• How could a transition coaching help in the first 6
critical months?
• Do we give access to network opportunities (e.g
Swiss business community)?
• How do we use the gained know-how when the
assignment is completed?

11. Expatriate transition:
From an employee’s point of view
• How do I prepare myself and my accompanying
person?
• Are my language skills sufficient to ‘survive’?
• Who can help me to make the transition as smooth as
possible? Do I have access to social and business
related network opportunities?
• Am I aware of the cultural differences, local living
conditions and leadership requirements?
• Am I flexible enough to deal with uncertainty?
• What is my motivation to do it?

12. How to do it right:
Wie machen es denn die Chinesen?!?

13. How to do it right:
Due Diligence:
• targets: employees, suppliers, customers,
(JV) partners
• verify SAIC, TM, domain names and similar
registration documents
• Professional advice is recommended
Documentary:
• Employment agreements & Sales Contracts:
• Confidentiality, IPR, Non-competition
Organisational:
• family / accompanying person

14. How to do it right:
Organizational:
• HR organization and processes
• controls, surprise visits, electronic surveillance,
etc.
• Whistle blower / hotline
• Just because you‘re paranoid doesn‘t mean
they‘re not out there to get you...
Comprehensive HR Compliance Training:
• (regular) interviews
• Sound selection process and criteria
• (regular) training and retention programmes
• Sign-offs?

15. What to do when things go wrong:
• Speed & Coordination
• facts and information gathering
• Coordination with service investigators,
(external/internal) CPA, attorneys,
(external/internal)
IT personnel
• Once facts are clear, establish the law...
• prepare options and scenarios, game plan
• Legal actions: use strategy, combinations,
staggered attacks

16. What to do when things go wrong:
• Know thy authorities!
• Know the media!
• Know thy law!
• Know thy enemy!
• Use competent external help and specialists
• Strike a balance: formal and informal actions
• In China: use „adminstration-friendly“ tactics

17. Thank you for your attention!
謝謝!