Injection molds provoke commercial disputes between China and the United States

November 22, 2021

Headquartered in Fellowes Inc, Itasca, Illinois, USA. The commercial dispute between the company and the joint venture in China was pushed to the forefront in an increasingly fierce U.S.-China trade dispute.

CEO James Fellowes accuses his partner of stealing Fellowes Inc after taking over the joint venture. The mold of the company's shredder product line injection molded parts and the termination of normal delivery caused the company to be forced into bankruptcy. The case is still pending in a Chinese court.

At the end of March, US Secretary of Commerce Locke Locke, requested by Sen. Richard Durbin to intervene in the case, said in a reply that the representatives of the U.S. Department of Commerce and the Illinois Department are “in-depth involvement with the local and central government officials in China”. For Fellowes.

Locke sent a letter on April 21 stating: “We have let the Chinese authorities know the impact this case may have on China’s investment environment, especially in Jiangsu Province, and emphasized that the U.S. government has resolved the case fairly, openly, and quickly. The attention paid to other commercial disputes," Richard Durbin’s office subsequently issued a letter on Tuesday.

Locke is particularly concerned about this case because he has been nominated as the next US ambassador to China. He said in Washington that the United States welcomes Chinese companies to invest in the United States. This is "a good thing" because it will help increase employment.

Locke said: "However, unfortunately, the situation of American companies in China is not the case. They are often shut out of the entire industry or forced to abandon proprietary information as a condition of exchange in China."

“Inequality of opportunities is the main obstacle to the continuous improvement of the U.S.-China trade relationship. The broader trend that this reflects is the recent commercial environment that began after China’s successful opening of the country and its great success. Exclusivity."

Fellowes began producing cheap shredders in China in 1998 and outsourced production to two companies owned by the Zhou family. In order to expand its production capacity, the company formed a joint venture in 2006 with 50% of Jiangsu Xinrui Machinery Co., Ltd., a subsidiary of a large holding company owned by the Zhou family. By 2009, the joint venture's sales had reached 1/4 of Fellowes' approximately $639 million in sales. At that time, there were about 120 suppliers and 1,600 employees, which accounted for more than half of its overseas employees.

In an e-mail, Fellowes stated: “Franklow Locke has already deeply understood the problems faced by U.S. investors in China.”

Although Fellowes is expected to win the case and recover its own mold, the company still had to “stop production for a second time and re-create new molds to ensure that the affected products are resumed as soon as possible. Fellowes is expected to be at the end of the year. Prior to its main product line to re-sale and return to office supplies sales directory."

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