China, Europe and the Netherlands: Opportunity Is Knocking at Our Doors

 
trends in China’s economic transformation, and generate 
continuous innovation in “going out” and “attracting in”.
Pizza Express was an established British brand with 
a fifty-year history, the majority of its more than 500 
restaurants worldwide located in the UK and its trials 
in China having just begun. When we struck, we had 
a more specific investment focus: both steadying the 
UK market and expanding the Chinese market, thus 
helping it seize the “China advantage”. This investment 
does not only “look good” but also “taste good”.
Hollywood-based STX marked the first entry by a 
Chinese equity investor into the heart of the US enter-
tainment industry. Building a bridge between the two 
to bring together Chinese audience demand and Hol-
lywood’s artistic expertise, production leadership, and 
management excellence, will enable Hollywood films to 
tell the true “China story”.
In an age when countries around the world are cur-
rently going through a period of transition, China's in-
fluence and contribution must shift to include finance, 
culture, social governance, and reform and transforma-
tion. As part of this, resources must be provided to cap-
ital in order to enable greater understanding between 
China and the rest of the world.
Using finance to give wings of innovation to 
industrial globalization
As China shifts from being a net capital importer 
to a net capital exporter, the ways in which Chinese 
industry integrates into the world are also undergoing 
change. In addition to direct “going out”, investing Chi-
nese capital in the real economy worldwide is crucial 
to enhancing the competitiveness and influence of the 
Chinese economy.
Firstly, purchasing shareholdings in leading foreign 
businesses enables high-quality technology, branding, 
management concepts, as well as international talent to 
service the Chinese market. This helps to build Chinese 
businesses which are competitive worldwide. Many 
Chinese companies are already listed among the “Global 
500” in terms of revenue, but this is often a result of 
their monopolistic positions. They are very much “paper 
tigers”, unable to compete on the world market. The 
assistance of capital is required to create a number of 
outstanding, truly competitive businesses, and provide 
China’s economy with true strength and vitality.
Secondly, China holds large amounts of foreign 
exchange reserves, and many Chinese companies are 
also in a strong financial position. However, new paths 
must be opened up in order to diversify investment 
categories and reduce asset risk. We cannot merely rely 
on buying US Treasury Bonds; China’s capital must be 
invested in the real economy worldwide, so it can bene-
fit from global technological and scientific progress and 
corporate development.
The proper investment of Chinese capital in the real 
global economy requires policy support for the free flow 
of capital. Our own experience has shown the crucial 
importance of the Shanghai FTZ trial in enhancing the 
competitiveness of Chinese companies. In 2014, follow-
ing the FTZ’s rollout of its cross-border investment pol-
icy, Hony successfully tested its “first FTZ cross-border 
equity investment” with its acquisition of PPTV. We 
realized that the triple influence of the transformation 
of government functions, increased operating efficiency 
of Chinese companies, and their competitive efficiency 
in the international market place, will enable Chinese 
companies to take their place at the same starting line 
as their international counterparts.
We received a further piece of good news at the end 
of last year, when the State Council announced that ex-
cept for those projects subject to specific regulations, 99 
percent of Chinese overseas investment projects would 
no longer be subject to prior approval. In this new en-
vironment, the two-way free flow of capital in the field 
of equity investment will greatly increase the global 
competitiveness of Chinese capital and its real econo-
my. Hopefully, this will help to promote outstanding 
Chinese companies to excel on the world stage.
104 
  Apr. 2015
Investment 
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Apr. 2015 
  105 
WWW.BOAOREVIEW.COM
I
n May 2014, the Third Revision of China’s Trade-
mark Law (the “Amended Trademark Law” or the 
“Law”) took effect, providing foreign companies 
combating trademark squatters in China with poten-
tially valuable new protections. Trademark squatting, 
which is the practice of filing a trademark application 
for another party’s mark, often in a country where that 
party does not already hold a trademark registration, 
is an especially common practice in China as it is a 
first-to-file jurisdiction. Among other provisions, the 
Amended Trademark Law attempts to deter trademark 
squatting through the imposition of new good faith fil-
ing requirements. Several other provisions also appear 
to further take aim at bad faith applications. 
The true value of the Amended Trademark Law will, 
however, only be revealed by the manner in which it 
is implemented. Trademark squatters in China have 
grown increasingly sophisticated—in fact many are 
current or former trademark agents—and will register 
numerous marks in the hopes that at least one of them 
will result in a trademark violation claim. In adjudicat-
ing and implementing the Amended Trademark Law, 
China’s courts must aspire to greater consistency and 
transparency, particularly when dealing with squatters’ 
multiple registrations. Only then will the law engender 
the intended environment of judicial consistency, ef-
ficiency, and good faith, and provide legitimate trade-
mark holders with the protections they expect. 
Trademark squatters are a problem for 
multinational companies in China
The structure of China’s trademark system is ripe 
for abuse by squatters. As noted, China is a first-to-file 
jurisdiction for trademark registration. Moreover, its 
system does not require evidence of prior use or owner-
ship when filing, leaving registration of popular foreign 
marks open to third parties. Finally, China requires 
single-class, as opposed to multi-class, trademark 
China’s courts must aspire to greater 
consistency and transparency, when dealing 
with trademark squatters. Only in this way 
will the Amended Trademark Law engender 
the intended environment of judicial 
consistency, efficiency, and good faith, and 
provide legitimate trademark holders with the 
protections they expect.
By William M. Leahy and Stephen Kho
Is China’s 
Amended 
Trademark Law a 
Law with Teeth, 
or a Paper Tiger?
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