IJMB Journal – Abstracts
International Journal of Management and Business
IJMB Volume V, Issue 2
The Implications of China’s 2010 Tort Liability Law for Foreign Companies doing Business in China:
Donovan A. McFarlane
In this paper, the author examines the new Chinese Tort Liability Law in terms of its implications for foreign companies doing business in China. The author introduces the playing field in which companies are operating in the Chinese market as the new law emerges. Thus, the author examines the economic and legal terrain before and after the passing of the new Tort Liability Law of 2010, looking at the Foreign Corrupt Practices Act (FCPA) and its usefulness and application, as well as an environment previously characterized by a lack of legal rights for individuals, particularly Chinese employees. A basic understanding of tort law is presented through definitions and components before the author examines the meaning and importance of the new law and its most salient provisions and requirements in light of the issue under consideration in this paper. The implications and consequences of the new law for both domestic and foreign businesses in China are analyzed and the author focuses on the vulnerability of foreign businesses given the philosophical underpinnings and Confucian tendency of Chinese society. In the final analysis, the author explores the criticisms and other obstacles which the new law must face and provides several recommendations for foreign companies doing business in China to lessen or avoid liability actions and claims.
Keywords: Chinese Tort Liability Law, FCPA (Foreign Corrupt Practices Act), negligence, PRC (People’s Republic of China), PC (People’s Court).