Features & Analyses

Landmark Regulations Expand China's Banking Sector
How do the new Regulations for the Administration of Foreign-invested Banks, enacted to fulfil China's WTO commitment, affect business for domestic and foreign banks?

New PRC Legislation against Money Laundering
How will the new PRC Anti-money Laundering Law limit or promote the business scope of financial institutions and foreign-invested enterprises?

A Rule Pushed by the Market: China's New Measures for Offering and Underwriting Securities
Upon reopening its market to IPOs, China's Securities Regulatory Commission introduced new Measures which change the way underwriters and institutions conduct IPO price inquiries. What do these Measures entail and how will they affect China's market in the future?

Broader Investment Choices for Insurance Companies
Will the Circular on the Investment in the Equity Interests of Commercial Banks by Insurance Institutionsdiminish benefits for foreign investors? How will local insurers manage the new dimension of competition?

Safe Harbour Protection in China: How China's New Regulations Protect the Information Dissemination Rights of Digital Networks
The article compares safe harbour laws in China and the United States and analyses how the law in China might have influenced the case of Baidu.com.

Sellers' Remedies and Strategies when Dealing with Financially-Distressed Buyers in the United States and Taiwan
The United States and Taiwan are among China's top trading partners. How do Chinese companies navigate two different legal systems to recover their losses from defaulting parties?

Clarifying the PRC Arbitration Law: Questions and Answers
The Supreme People's Court's recent interpretation addresses concerns over the validity of arbitration agreements and enforcement of arbitral awards in China.

China QFII Rules Revised - Significant Developments for Foreign Fund Managers
The newly revised QFII rules aim to lower the entry threshold and allow more QFIIs into China's capital market. What investment restrictions have been lifted? Are there significant improvements to the original rules?

New Rules for Labour Dispute Litigation
An increase in disputes is one of the likely results of new rules issued by the Supreme People's Court on employment disputes handled by China's courts.

The Benefits of Having In-house Legal Teams in China
This article discusses how corporations can minimize these risks and the benefits of building a strong in-house legal team in China.

Clean Development Mechanism Projects in China
China is well placed to fully benefit from the Kyoto Protocol's clean development mechanism, which allows polluters in industrialized countries to offset emissions by investing in climate-friendly technologies and infrastructure projects in China.

China's New Bankruptcy Law: A Legislative Innovation
The PRC Enterprise Bankruptcy Law modernizes the PRC corporate bankruptcy regime, applicable to both state-owned and domestic and foreign private companies.

China's New Foreign-funded M&A Provisions: Greater Legal Protection or Legalized Protectionism?
The Provisions add extra regulation by installing a more transparent and tightly controlled administration system and imposing additional requirements for foreign exchange registration.

China Overhauls Takeover Code of Listed Companies
China's new Takeover Code imposes stringent information disclosure requirements and clarifies rules to make the acquisition process more efficient.

New Provisions for Corporate Governance of Fund Management Companies
Under the new guidelines, will the interests of fund unitholders be protected? What are the responsibilities of directors and shareholders under these new guidelines?

New Measures on Foreign Investment in China Real Estate
Prohibits direct offshore ownership structure, guaranteed fixed returns for foreign-invested real estate enterprise, and heightens scrutiny in the area of equity interests transfer and merger & acquisition in real estate-related industry.

China Customs Valuation:Software Exempted; E-Content and IP Royalties Still at Risk
The new Measures notably improves protection for computer software importers and supply chains by confirming that customs import duty will not be levied on most data-processing software.

Adjudicating Letter of Credit-Related Cases
The Provisions define applicable laws where international practices represented by the usual UCP 500 do not cover the disputed LC issue, the legal relationship between the parties to an LC, and the concept of ‘LC fraud’.

CEPA IV: Headlines and Fine Print
The fourth phase of the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the PRC made headline news that trade between the two sides would be further liberalized. But is Hong Kong really given that much of a head-start?

Commercial Bribery Under Fire in China
The PRC government increased its efforts to combat commercial bribery in China by issuing the Opinions on the Launch of Dedicated Work to Tackle Commercial Bribery. Under the new rules what practices should a company adopt when conducting business in China?

Case Study: Minority Acquisition of a Listed State-owned Enterprise in China
Listed state-owned enterprises (SOEs) present strategic foreign investors with attractive investment opportunities, as they seem to have a pricing advantage and better corporate governance compared with domestic private companies. However, what challenges are involved in acquiring a minority stake in a listed SOE?

China Liberalization of Outbound Portfolio Investment: Precursor to QDII
China is one step closer to the qualified domestic institutional investor (QDII) programme, allowing banks, fund management firms, insurers and securities institutions to convert Chinese clients' renminbi into foreign currency and invest it overseas.

New Rules on Equity Offerings: Lifting the Ban on China's Share Sales
New restrictions are in place on share offering, price floor and private placements in particular for foreign strategic investors. A new three-stage application process is introduced.

China Reopens its Doors to the IPO Market
After a one-year suspension of new share sales, the Measures reopen the PRC’s stock market with tightened listing requirements.

PRC Outward Direct Investment: Liberalization Momentum Consolidated
The Circular drops the previous acquisition deposit requirement but adds a repatriation requirement where approval procedures are not completed within six months.

Current Foreign Exchange Reforms by SAFE
Service-related foreign exchange payment procedures are simplified. Domestic entities and domestic individuals benefit from procedure simplification for contracts below US$5,000 and an increased foreign exchange purchase limits to US$20,000.

China's Foreign-invested Companies: A Standardization of Practices
The Implementing Opinion issued jointly by the State Administration for Industry and Commerce, the Ministry of Commerce, the General Administration of Customs adn teh State Administration of Foreign Exchange clarifies issues such as organizational structure, incorporation form, timing and documentary requirements pertaining to approval applications, registration and capital contribution of foreign-invested enterprises, reinvestment requirements as well as approvals and registration of amendment. In particular, it elaborates on the basic rules in Article 218 of the Company Law on the applicability of laws to foreign-invested companies, and establishes the position that Company Law should govern foreign direct investment in China unless pre-empted by FIE laws. The Opinion also produces a list of FIC classification, including 13 FIEs formed as limited liability companies and 10 as foreign-invested companies limited by shares. The respective roles of board of directors, the shareholders' meeting, and the articles of association in corporate governance of various FIE structures are delineated.

China's New Accounting Standards A Brief Guide
China has revised and issued new accounting standards, bringing the country's financial reporting system for listed companies in line with international practices.

Paving the Yellow Brick Road: China's New Rules for Pension Funds'Overseas Investments
In a bid to raise returns and diversify its portfolio, the PRC's National Social Security Fund has asked foreign institutions to apply to manage its billions of dollars in pension funds to be invested overseas. What type of investments are permitted and what mechanism has been put in place to safeguard the overseas management of the investment funds?

Infrastructure Projects: A New Frontier for Insurance Funds Investment
In an effort to widen insurers' investment options, insurance regulatory authorities have issued new rules launching a pilot programme allowing insurance companies to invest in infrastructure projects. Will the new laws provide a safe means to boost returns for China's insurance companies and their policyholders?

Sunsets Over Chinese Anti-dumping Measures: A Practical Guide
In 2005, China's Ministry of Commerce announced the expiry of anti-dumping measures offering protection to various Chinese domestic industries from imported products being 'dumped' onto the local market. Given that domestic industries actively participate in 'sunset' reviews to extend the application of the measures, it would be practical for foreign producers and exporters to become familiar with the procedural and substantive elements of the sunset review process in China.

China's New Email Service Measures: Trying to Get Rid of the Junk
The Measures for the Administration of Internet Electronic Mail Services is the first legislative attempt to address the surging internet usage in the PRC through stipulations on the provision of internet email services, the provision of access services to internet email service providers (ESPs) and the sending of emails using the internet inside the PRC. Emails containing ‘commercial advertisements’ are imposed with requirements on labelling, recipient delisting, and recipients’ express consent. ESPs were also required to comply with new technical and administrative provisions, breach of which shall attract fines. However, without an express definition of ‘spam’ and ‘advertising’, the precise effect of the law remains to be seen.

Corporate Governance under the New Company Law (Part 2): Shareholder Lawsuits and Enforcement
China's new Company Law has laid a solid foundation for companies to improve their corporate governance, including new provisions granting significant rights to minority investors vis à vis management and controlling shareholders. The new law also grants shareholders the ability to enforce these rights through derivative and direct lawsuits. However, given China's weak enforcement environment and relative inexperience with private lawsuits, is the new law adequate to uphold shareholders' rights?

Renewable Energy Law Encourages a Hundred Flowers to Bloom
New PRC legislation encourages and supports a broad range of renewable energy and related products and activities, in pursuit of energy supply diversity and security, environmental protection and sustainable development. Promotion of domestic manufacturing may leave foreign equipment exporters out in the cold, while foreign investors and technology providers stand to benefit from incentives and an expanding market.

Corporate Governance under the New Company Law (Part 1): Fiduciary Duties and Minority Shareholder Protection
The Chinese corporate governance regime is increasingly under attack as a hindrance to important economic reforms. China's new Company Law improves corporate governance by introducing fiduciary duties and minority shareholder protection. However, does the new law provide enough protection to safeguard the interests of investors in Chinese companies? What other implications are involved and how will this impact the management of companies in China?

New Regulations on Equity Incentives for Employees of Listed Companies
Listed companies can apply for implementation of equity incentive measures and establish a comprehensive incentive and regulatory scheme. Listed companies may use its own shares as the subject matter of long-term incentives (including restricted shares and stock options) offered to its directors, supervisors, senior management personnel and other staff and workers. This Measures establish detailed regulations regarding incentive modes, incentive targets, source of shares, incentive amount, grant price and grant period etc.

Chinese Domain Name Dispute Resolution
Chinese domain names have become an important online marketing tool for businesses with a strong presence in China. However, the lack of regulation is a major concern and may lead to website domain name disputes. What options are available to resolve such disputes and how can businesses protect these intellectual property rights?

Electronic Banking Services in China: New Developments and Security Protection
The range of electronic banking services provided by PRC financial institutions has widened to cater to the needs of increasingly technology-driven and sophisticated banking customers. What measures have been taken to protect the security of e-banking systems in China?

New Regulations on Commercial Banks' Individual Wealth Management Businesses
A relief in the restriction of the types of financial products offered by commercial banks broadens and diversifies the personal wealth management services they offer. Permitting banks to offer higher rates than the PBOC rate, and allowing wealth management products other than deposits, banks now enjoy higher competitiveness in the financial industry. The Tentative Measure provides for the relevant administration and risk management rules.

Opening Up China's Construction Engineering Services Market
As part of the government's efforts to reform the construction sector, the Ministry of Construction has issued draft provisions on the administration of foreign-invested construction engineering service enterprises. Do these provisions go far enough to encourage greater foreign investment in the sector?

New Rules on Strategic Investments by Foreign Investors in Listed Companies
The new rules on foreign strategic investment aim to restore investor confidence in merger and acquisition activity in China. What are the new reforms and how will they assist new investors in Chinese listed companies?

Environmental Impact Assessment for Construction Projects in China
Whilst China's new measures for environmental impact assessment are good news for the environment, these may cause problems for project owners by potentially delaying construction and even losing business opportunities if a public hearing is required.