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v----------
World Trade Organization
and any general treaties
----------v
v----- United States
<--- Bilateral Trade Agreements --->
China -----v
Microsoft  
Beijing LTD?

As I understand it:

  1. A company must obey the laws of the land, e.g. Microsoft must obey the laws of the United states, and the state in which it is incorporated, e.g. Delaware. -- For example Microsoft should obey the Antitrust laws
  2. A country must effectively, or actually, encode in its laws the provisions of any Bilateral Trade Agreement that is ratified, e.g. Microsoft must obey the conditions of any Trade Agreement that is ratified between the US and China.
  3. A country's laws and practices must be in agreement with any general treaty, e.g. the World Trade Organization, that the country signs on to and thus the country must effectively legislate and enforce the provisions of such agreements. --For example a US company should obey the DMCA that was passed to satisfy the conditions of the World Intellectual Property Organization Copyright Treaty ("WIPO Treaty")

This topic, relative to the Internet, though of course it is valid for other laws that are involved with inter-countary trade, i.e. all laws, is discussed in the Harvard law session: Jurisdiction in Cyberspace (July, 2002)

Current, Past laws in IP

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