Richard Li reviews China Business Law Journal’s first decade of covering China’s legal market

With the publication of this issue of China Business Law Journal, we have reached two important milestones – the publication of our 100th issue and the celebration of our 10th anniversary. In today’s challenging publishing environment, such milestones are not reached easily.

One hundred issues in, we have interviewed literally hundreds of the top lawyers and in-house counsel within China and elsewhere, spoken to learned members of the judiciary, secretaries and ministers of government, and the best of academia. We have felt the pulse of the legal consciousness in China on issues concerning its quickening evolution, gleaning views across the spectrum, from the very cream of Chinese lawyers to the humblest young associate.

chinaAnd with all this history, everything began with you. Prior to the very first issue, the ethos for our journal began with listening to what our desired readership wanted to see in our new publication. “Practical, bilingual and for in-house counsel” were key words from our potential readers when we conducted research to decide upon the editorial principles for this magazine.

Those words have set the tone for our journal since. Through all the events and matters needing legal insights, the question at editorial meetings remains: “What information will be valuable and useful to in-house counsel and corporate executives?”

In the past 10 years, we have been growing together with China’s economy and the country’s legal services market. Our inaugural issue was published in January 2010, at a time when the world was still under the horrible shadow of the huge 2008 global financial crisis (GFC).

Our cover feature of the first issue found that although China kept growing at a relatively high rate, some lawyers were not sure whether that meant the crisis was over – or that it had not hit China yet. Given the downturn, many companies had tightened their budgets for legal expenses, and subsequently taken more work back to their in-house legal departments.

It turned out that China did not undergo a serious economic recession because of the 2008 financial crisis. In fact, the country’s GDP growth curve continued its rise. In 2010, China surpassed Japan in terms of total GDP, securing its position as the second-biggest economy in the world.

As the financial crises in the West slashed the prices of many quality overseas assets, Chinese investors – both state-owned and private – became active in overseas investment. The Belt and Road Initiative (BRI) expanded Chinese investment in developing countries as well. In line with this trend, Chinese law firms have also grown and expanded quickly on the global stage, along with the emergence of some “mega” Chinese law firms worldwide.

Interestingly, 10 years on the world again stands at the precipice of what may be another serious economic downturn. China’s situation is also plagued by a trade conflict with the US. Will the nation be able to maintain economic success? That is a question for the next decade.

Throughout these years, we have closely monitored capital markets, M&A, intellectual property (IP), arbitration, compliance, overseas investment, etc., and by this continual coverage we have tracked the crucial trends of China’s legal and regulatory developments. Overall, it is fair to say the incredible speed of improvements within the legal sector, and with regulatory evolution, has dominated the big picture of business law in China.

Overseas investment

In terms of M&A, Chinese investors were very active in the first half of the 2010s. In February 2012, our cover feature analysed how the euro crisis might open more opportunities for Chinese investors, since many companies in Europe were still facing the financial squeeze of the GFC. The US was another popular target market for Chinese investors at that time, although transactions in some key areas already faced a high chance of being blocked.

ChinaChinese investment has slowed in developed markets in recent years, given the increasingly tighter scrutiny from regulators in these countries. In contrast, investment in developing countries along the Belt and Road has increased.

In 2017, we published a special series of reports on the BRI, the country’s massive blueprint for outbound investment and cross-continental economic connection. We explored the most pressing issues in the development of this project, including the big challenges ahead for legal experts in overcoming the huge diversity of cultures, business practices and legal systems in so many different countries. The reports also looked at some of the large-scale infrastructure and project finance deals, as well as the long-term implications of the initiative including the hoped for entrenchment of mature legal systems in involved developing countries.

As cross-border commercial activities between China and other countries rise quickly, so commercial disputes grow just as rapidly. This has made commercial arbitration one of the more promising businesses in the legal services sector in recent times. Many domestic and international arbitration institutions are keen to be involved in this market, and the “internationalization of Chinese arbitration” has become a hot topic in China’s arbitration community.

chinaOur latest report on arbitration graced the cover of the September 2019 issue. The revision of the Arbitration Law is now on the agenda of China’s legislative body, and some arbitration centres have adjusted their rules to adopt some good international practices. Some of China’s better traditions in arbitration practice have also been exported abroad, for example in mediation. So, while China’s arbitration practice becomes more international, international practice is also becoming more Chinese. It’s the view of many experts that this “internationalization” should not be a single-direction process, and that China’s arbitration community should be confident enough to have its voice heard in the world.

IPO first choices

In our IPO feature stories, we found that although the US has been an important choice for Chinese companies, its attractiveness has decreased. From 2014 to 2016, there was a wave of Chinese companies going private and delisting from the US market due to either higher valuations back home or regulatory pressure in the US.

chinaHong Kong has long been a popular IPO venue for mainland companies, especially so in the past year-and-a-half, since reforms in April 2018 enabled companies from emerging and innovative sectors with weighted voting right (WVR) structures, and biotechnology companies without a prior record of revenue or profit, to be listed in Hong Kong. Alibaba’s IPO in November 2019 was the biggest after this reform and to date.

The A-share market has transitioned from an approval-based system for IPO applications to a registration-based system, which has not covered all A-share markets yet, but has been applicable for the Sci-Tech Innovation Board (STAR Market) launched in June 2019 by the Shanghai Stock Exchange.

Just before the board was officially launched, our cover feature in the May 2019 issue analysed the changes it would bring. Technology companies are widely seen as the pillar of a successful securities market today, and the new board was designed for such companies with more friendly listing requirements. The next decade will witness whether world-class technology companies will emerge from this board.

Intellectual property

chinaLack of IP protection has long been a source of criticism from the US, as witnessed in the recent trade war negotiations. But our coverage in these past years reveals that China has attached unprecedented importance to IP protection and accelerated regulatory changes in leaps and bounds. These advances in IP protection have also benefitted Chinese companies because the country’s economic growth is increasingly reliant on technology-intensive industries.

China has built a network of IP courts and tribunals in key cities countrywide. At the start of 2019, the IP tribunal of the Supreme People’s Court was established in Beijing to unify and standardize the trial of IP cases in future. Most importantly, punishment on infringers has been raised to a level that is strong enough to stifle possible crimes.

Our latest coverage of IP, in the April 2019 issue, pointed out that some foreign companies still lack a sufficient understanding of China’s evolving IP protection system, and explains that the blind spots and misunderstandings of these foreign companies may run them the risk of having an ineffective IP protection plan in China.

Billing rates

chinaOur research strives to provide valuable data for in-house counsel, and in November 2017 we made a bold move to ask Chinese law firms to disclose their hourly billing rates. Executives and in-house counsel have long told us they would like to see transparency and consistency in the way that law firms charge for their services, but compiling such information had never been achieved before for public use. We saw a challenge.

Initial results were predictable, and many law firms politely refused to share their confidential billing rates, but as we persisted with our efforts to explain the rationale behind this project, we began persuading many firms to participate. Our groundbreaking first report was popularly received by our readers.

Since then, more law firms have realized the value of this project, and in the latest billing rate report, published in October 2019, we received responses from 29 quality law firms. The latest report finds that lawyers in Chinese law firms, ranging from junior associates and managing partners, charge an average RMB2,911 (US$420) per hour. We are confident that more law firms will join this project in future years, helping us to set yet another benchmark for China’s legal services market.

Awards

Deals of the Year was launched in our February 2011 issue, and since then it has been published annually in the bi-monthly December/January issue. The evaluation is based on submissions received from law firms. When determining the winning deals and cases, we do not merely look at the deal size, but focus more on their significance, complexity, difficulties, creativity, etc.

chinaThe inaugural China Business Law Awards was published in our February 2014 issue. Decisions were made according to nominations by corporate counsel, submissions from candidate law firms, and comments from referees provided by these firms.

The A-List, which features the prominent private practice lawyers for China-related business, was first published in our November 2016 issue. The assessment criteria for this is nominations and feedback from corporate counsel, combined with our own extensive research.

The methodologies for these awards were carefully designed to make sure the final results are impartial and reflect market sentiment. We are glad to see that many in-house counsel have taken our awards as an important reference when they look for external legal advisers.

After so many years of collaborating with corporate counsel, we have found that although they are making an increasingly important contribution to the development of their companies, the recognition and attention they receive is not proportionate.

Therefore, we initiated our first research on outstanding individual in-house counsel and in-house counsel teams. The result of our inaugural CBLJ In-house Counsel Awards was recently published in the November 2019 issue. We hope that more in-house counsel will receive the recognition they deserve in the next decade.

High-level interviews

chinaWe are honoured to have interviewed some high-profile players in the legal sphere in the past 10 years. In September 2013, we talked to Rimsky Yuen, the then secretary for justice in Hong Kong. The close economic integration had given rise to judicial and enforcement issues between the legal systems of mainland China and Hong Kong, and at that time there were only limited forms of mutual legal assistance.

Yuen played an important role in building channels of communication between the two jurisdictions to resolve such issues. He was also working hard to make Hong Kong a dispute resolution hub for Asia, and actively liaised with mainland authorities to secure country-level support.

Since our interview with the secretary, more progress has been made on judicial co-operation between the mainland and Hong Kong in the realm of business law. In January 2019, the Supreme People’s Court and the Hong Kong government signed the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region. In April 2019, they signed another Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the mainland and of the HKSAR.

Our interview with Singapore’s Chief Justice Sundaresh Menon, published in the November 2016 issue, supported the premise that an increasing number of people believe we are living in an “Asian century”. Economic projects that reflect regional economic integration, such as the Asian Infrastructure Investment Bank (AIIB), the BRI, and the Regional Comprehensive Economic Partnership (RCEP), received extensive coverage and discussion at the time. However, the legal systems across Asian countries are diversified, which increases the risks for cross-border business.

Menon argued that economic connection does not mean the convergence of business laws will happen naturally. However, he said there was an urgency to formulate a seamless transnational legal framework for cross-border trade and commerce.

Given this backdrop, top-level judges and legal scholars from China, Australia, India and Singapore set up an institute in January that year committed to conducting research and promoting the convergence of Asian business laws. Menon said that although Asia had good economic prospects, it was not predestined – continual efforts had to be made to improve the region’s attractiveness so that the “Asian century” would finally arrive.

chinaThe February 2018 issue featured Miguel de Serpa Soares, under-secretary-general for legal affairs and the UN’s top legal counsel. His work experience at the UN had reinforced the conviction that we need an international order that is based on norms and rules, although the order was facing big challenges at that time.

In our interview, Soares said a well-developed modern and harmonized commercial law regime could help address most of the risks and concerns related to doing business across the Belt and Road countries. He gave the example of the New York Convention, which had ensured the enforceability of foreign arbitral awards in a wide spectrum of countries, and shaped a global preference for commercial arbitration.

Development of firms

In the July/August 2012 issue we published the first edition of China Business Law Directory, which contained extensive listings of Chinese and international law firms and provided an authoritative reference for corporate counsel and senior executives.

chinaWe have since formed the tradition of publishing the directory in conjunction with detailed research reports, checking the pulse of China’s legal services sector and trending market issues.

Over the years, we have witnessed the growth of Chinese law firms and the difficulties they face. As Chinese overseas investment has grown significantly, Chinese law firms have been expanding overseas as well, setting up offices in London, New York and other key cities.

Some firms chose to combine with other international firms, such as King & Wood’s merger with Mallesons, and Dacheng’s merger with Dentons.

Some Chinese law firms choose to build stronger ties or alliances with foreign local firms, so that they can play the role as a general co-ordinator when they advise on Chinese investors’ overseas projects.

The growth and internationalization of Chinese law firms has brought increasing pressure to international law firms in China. Some of these have closed their offices in China, and some have lost important partners, or even managing partners, to Chinese law firms or Chinese companies’ in-house departments.

Other international law firms established joint operations in Shanghai with Chinese law firms – usually their long-time local partners – because such a joint operation is allowed to practice both PRC and foreign law. Some international firms focus more on highly complex and specialized foreign legal issues.

Competition between Chinese law firms has also intensified. Some firms have striven to expand their size and increase their offices so that they are able to provide more comprehensive one-stop services, while others have opted to become boutique firms specializing on only a few areas – usually where clients need continued services, in areas like IP and litigation.

Chinese law firms are also paying closer attention to management issues. Quite a number of them have first-generation heads who have reached the age for handing over management to younger partners. Many law firms have focused more on the selection and training of young talent, and the centralization of management has also become a trend. Although almost all law firms are set up as partnerships, many firms now run themselves in a company style.

Lexicon

chinaWe must also take this opportunity to thank Andrew Godwin, who has been writing our Lexicon column since our second issue. Godwin was a former partner at Linklaters in Shanghai, and he now teaches law at Melbourne Law School in Australia, where he is an associate director of its Asian Law Centre. His column focuses on exploring and comparing legal terminology, legal concepts, and issues facing the legal profession in the Chinese and English/Western contexts.

When he started, he was not sure whether he could write a regular column, but after 100 issues, Lexicon is still going strong, and still one of the most popular regular features for our readership. The collection of his first 40 articles was published in the book China Lexicon in 2014 by Vantage Asia. Given readers’ positive feedback, a second volume is being considered. Godwin is still full of inspiration and interesting ideas, and Lexicon continues to be an outstanding success.

CBLJ forums

In a significant expansion of China Business Law Journal, we were honoured to start arranging conferences in 2019, with our first held in Beijing in April, and the second soon after, in Shanghai, in November. Our conferences focus on practical legal issues and challenges facing companies, with a series of panel discussions between lawyers, business leaders and general counsel from leading law firms and reputable companies. We are grateful that our first two conferences were very well attended and received positive feedback.

Last but not least, as this article tracing our 10 years ends, we would like to take this opportunity to express our deepest gratitude to all our readers, friends and business partners who have given us encouragement, suggestions and feedback during our tremendously rewarding journey. Your support has been essential to the success and achievements of this journal, and we dearly hope you stay with us as our journey continues.


Forging ahead

As China Business Law Journal celebrates the 10th anniversary of its founding, we asked senior in-house counsel and lawyers about what they regard as the standout legal trends and developments of the past decade. Some also gave their observations on the growth of our journal

In-house insight


Liu Fang

General Counsel and Chief Compliance Officer, NIO

ChinaThe progress and development of NIO are closely tied to China’s policy direction of supporting the development of alternative energy vehicles. The support and adjustment of fiscal and tax policies have played a key role in the rapid development and transformation of China’s alternative energy vehicle industry.

China’s policy support system for alternative energy vehicles can broadly be divided into three aspects: macro planning and promotion policies; fiscal and tax support policies; and infrastructure construction policies. The Plan for the Development of Energy Efficient and Alternative Energy Vehicle Industries (2012-2020) has laid the foundation for: supporting the development of alternative energy vehicles; promotion and application policies; tax-break policies; providing fiscal subsidy support; and infrastructure construction policies ensuring use by consumers.

From 2010, with the conducting of a pilot subsidy project within a small area, to the nationwide rollout in 2015, the number of alternative energy vehicles sold, and the number of existing charging stations, have increased rapidly. Since 2016, the fiscal subsidy policy has been structurally adjusted by making technical indicator requirements tougher in order to address such unfortunate industry phenomenon as “subsidy cheating”, while also accelerating subsidy reduction.

Relevant policies will help in reforming the alternative energy vehicle industry from one driven by policy to one guided by the market, promoting transformation of the industry chain from one that is high-capacity to one that is high-quality and accelerating the retirement of obsolete enterprises and supply systems.

The “double points” policy, which follows on the heels of fiscal subsidy reduction, supports the market-oriented and high-quality development of the alternative energy vehicle industry. In September 2017, the Ministry of Industry and Information Technology issued the Administrative Measures for the Simultaneous Implementation of Average Fuel Consumption and Alternate Energy Vehicle Credits for Passenger Vehicle Enterprises and began implementing the administrative policy for simultaneous implementation of average fuel consumption points for traditional fuel vehicles and credits for new energy vehicles (NEVs), making the promotion of alternative energy vehicles more market-oriented through points trading. Passenger vehicle enterprises may freely trade their NEV credits which is, in effect, equivalent to directly increasing alternative energy vehicle subsidies.

Liu Jian

Senior Legal Director, Meituan Dianping

The promulgation of the E-Commerce Law was a key milestone in the development of regulation of the e-commerce sector, with all e-commerce platforms being required to operate in accordance with that law. The Foreign Investment Law has replaced the Sino-Foreign Equity Joint Venture, Sino-Foreign Co-operative Joint Venture and Wholly Foreign-Owned Enterprise Laws, which were in effect for many years, and will have a profound impact on China’s ability to attract foreign investment.

The Securities Law, as amended at the end of 2019, confirms the comprehensive implementation of the registration system for securities offerings and ceases to emphasize sustained profitability at the time of a new share IPO, a major advance in the reform of China’s capital markets.

Li Yikun

VP & General Counsel, Fox Financial Technology (Hong Kong) Group

chinaThe state’s strategy of a China ruled by law has been comprehensively promoted during the past 10 years. As people in the legal field, we have been fortunate enough to witness and personally experience marked progress in incorporating the idea of governing the country by law in legislation, the judiciary and law enforcement.

In the field that is of most concern to me, I would argue that the promulgation and implementation of the E-Commerce Law are of tremendous significance. During the past 10 years or so, China has achieved eye-opening results in the e-commerce and internet fields. As China’s first comprehensive law in the e-commerce field, the E-Commerce Law was promulgated on 31 August 2018, after the passage of five years, and implemented on 1 January 2019. Resolutely encouraging the principles of innovation, prudence and tolerance, the law regulates the healthy development of the e-commerce sector.

Victor Shen

Chief Legal Officer, Henkel Greater China and Korea

china

In the past 10 years, in terms of legislature, China has updated numerous laws and regulations, such as relevant laws relating to environmental protection, to keep abreast with its social and economic development, and streamlined relevant laws and regulations, such as the Foreign Investment Law and its implementation regulations, in response to the geopolitical evolutions such as the Sino-US Trade War, etc. The nation has also created a lot of new laws, such as the Cybersecurity Law and E-commerce Law, to ensure the proper safeguarding of newly emerged issues of cybersecurity and e-commerce.

In terms of enforcement, with the central government’s enhanced power and pressure from the international business community, the enforcement of laws and regulations in the general corporate and commercial field has improved significantly. The permission of societal supervision, such as social media on the corporate world, also highlights again the crucial importance of high-level compliance.

Going forward, I believe that high-level compliance will become the “new normal” requirements upon China’s corporate world, although challenges resulting from ambiguity in statutes, changeable enforcement trends, and conflicts among different regulations and enforcement agencies still need to be tackled.

As a premium bilingual publication focusing on legal practice, China Business Law Journal serves the role of bridging China’s rapid legal development and best international practice very well, especially with the articles authored by legal professionals with solid domestic experience in China, and international perspectives such as Lexicon.

Peter Su

General Counsel, Tsinghua Tongfang

china

What has left the greatest impression on me in the past 10 years has been the continual improvement in the series of corporate governance-related systems, such as the Company Law. In these 10 years, the Company Law was amended twice, and the third, fourth and fifth sets of judicial interpretations for the law were also issued. Additionally, such documents as the Code of Corporate Governance for Listed Companies, the Guidelines for the Articles of Association of Listed Companies, etc., which regulate listed companies, were issued.

In December 2019, the China Securities Regulatory Commission (CSRC) also issued the Several Regulations for the Pilot Project for the Spinning Off and Domestic Listing of Subsidiaries by Listed Companies, which was grand news for large state-owned enterprises like us.

Although China is a relatively late comer to corporate governance and capital systems, it has undergone thorough tempering in its market economy, and this has given rise to a set of closely knit legal and compliance systems, and integrated the interest demands of various stakeholders, making significant progress in capital systems and investor protection.

A sound legal system can improve the business environment, safeguard transaction security, encourage investment and entrepreneurship, and is of utmost importance to our enterprise.

The themes of the new forums sponsored by China Business Law Journal mirror the hot topics of the day, and the distribution of the participants from enterprises with different ownership systems, e.g., state-owned, foreign-invested, private, etc., has been balanced, providing diverse perspectives to analyze various issues. Additionally, attendees have been extremely positive, vigorously supporting the meetings, resulting in each meeting offering rich rewards.

Sun Bin

Chief Legal Officer, Xiaomi Corporation

China

Established in 2010, the Xiaomi Group, as an internet company focused on mobile phones, smart hardware and IoT platforms, has been a witness to the development experience of Chinese legislation in the past 10 years. These developments are reflected in numerous areas, including improvements in competition regulations, amendments to the Trademark Law, issuance of the E-Commerce Law, and revision of the Consumer Rights Protection Law.

Taking the area of trademarks as an example, the Standing Committee of the National People’s Congress revised the Trademark Law in April 2019. Additionally, the State Administration for Market Regulation issued the Several Provisions for Regulating the Application for Registration of Trademarks in December 2019.

The revision of the Trademark Law and the issuance of the regulations have strengthened the protection of intellectual property, further improved the business environment, resolved prominent issues that had arisen in practice, more effectively reined in the bad-faith registration of trademarks, and intensified the protection of the exclusive right to use trademarks.

The E-Commerce Law, which came into effect in January 2019, has also had a major impact on government regulation and enterprise development. Its issuance has laid out the rules for the development of the e-commerce industry, clarified the state’s intent to promote and encourage the development of e-commerce, and promoted fair competition online and offline. For our group, Xiaomi Youpin is an important internal e-commerce platform, and the E-Commerce Law is of major significance for accelerating Xiaomi’s duly carrying out relevant e-commerce compliance work.

In another significant development, 2014 was the year in which the Consumer Rights Protection Law was amended. This law sets out the rights of consumers, establishes and reinforces the legal foundation for protecting the rights and interests of consumers, patches the flaws in existing laws and regulations in the incomplete regulation of consumer rights and interests, and adds legal provisions addressing new online shopping models.

Eric Xie

VP/Chief Legal Officer, Foxconn Industrial Internet

China

I tend to pay the closest attention to the field of financial regulation. In a situation where global financial crises recur in phases, the central government has demonstrated unprecedented attention to national financial security, which is reflected in adjustments made to the top-level regulatory framework. This is more specifically manifested in the move from “one bank, three commissions” to “one commission, one bank and two commissions”.

“One bank, three commissions” was the abbreviation given to the People’s Bank of China (PBOC), China Banking and Insurance Regulatory Commission (CBIRC), China Securities Regulatory Commission (CSRC) and China Insurance Regulatory Commission by domestic financial circles before the reform of state bodies in 2018. The “one bank, three commissions” constituted the landscape for the sector-by-sector regulation of the Chinese finance industry.

The “one committee, one bank, two commissions” structure refers to the Financial Stability and Development Committee under the State Council, PBOC, CSRC and CBIRC. This new regulatory landscape was determined by the State Council on the basis of study of the global regulatory experience, particularly new global legislative trends after the 2008 financial crisis. As financial security fundamentally affects national security, a rational and effective regulatory model is of extreme importance.

Yuan Ye

General Manager, Legal and Compliance Department China Pacific Insurance

ChinaThe most significant regulatory move in the insurance industry in the past 10 years has undoubtedly been the merger of the CBRC and CIRC. In the past, the CBRC and the CIRC performed their respective functions. Although they enforced the law strictly, instances of mixing insurance industry and banking industry cropped up repeatedly in the course of law enforcement practice, and the origin and fundamental resolution of a not insignificant number of cases urgently required close co-operation between the two commissions.

The merger of the CBRC and the CIRC in 2018, which duly resolved the issue of cross-regulation and strengthened overall regulatory functions, is not only conducive to integrating regulatory resources, but is also more in tune with the characteristics of modern finance.

The Insurance Law, passed in 1995, was the first insurance law in the history of China, but its blemishes and shortcomings were gradually exposed with the rapid development of the market economy and insurance industry. In the past 10 years, the Insurance Law was amended three times, in 2009, 2014 and 2015. These amendments: addressed at the legislative level disputes commonly occurring in practice and strengthened protection of the lawful interests of parties to insurance; set higher requirements for compliant operation by insurance companies; and further clarified the duties of insurance regulators.

While granting insurance regulators greater authority, it also placed more responsibilities on their shoulders, which is conducive to regulatory and law enforcement authorities performing their administrative duties in accordance with the law and enhancing regulatory transparency.

China Business Law Journal not only concerns itself with mergers and acquisitions (M&A), listings and other such transactions, but also invites individuals onto the front lines of the law, such as with lawyers and arbitrators, to share their practical experience in resolving disputes.

Furthermore, it organizes forums that provide legal and business people with a platform and opportunity to meet and discuss current business trends, risk control, compliance, etc. China Business Law Journal not only permits us to stay abreast of the newest trends in the markets and commerce, but also provides us with lessons, approaches and practical help in terms of risk control, compliance, etc.

Peter Zhang

General Counsel and Board Secretary, Sony Mobile China

China

Ten years ago, industry circles heartily welcomed China’s Anti-Monopoly Law (AML). Today, cybersecurity and data and privacy protection have become the focus and heart of day-to-day corporate counsel work. A decade ago, compliance was a word seldom heard, but today the concept of compliance has become universal and the compliance list has grown longer.

In the past 10 years, business has been in a continual state of change, technical development has proceeded at an exponential speed, and the application of new technologies such as the internet of things, big data, the sharing economy, artificial intelligence (AI), blockchain, etc., have continually presented new challenges to application of the law, spurring the emergence of internet courts and intellectual property courts.

On the one hand, certain traditional repetitive tasks can be replaced with AI, while on the other hand, new titles such as chief data officer, chief compliance officer, etc., have sprung up. The centre of gravity of the work of corporate counsel has also been continually shifting as a consequence of these changes.

Ten years ago, people were not familiar with China Business Law Journal. Today, it has become an indispensable platform for industry circles, and a partner of corporate counsel. In the past decade, the content of China Business Law Journal has continually become richer in its depth and breadth, and it has increasingly hewed to the newest practices and cutting-edge fields.

From each step taken by China Business Law Journal, one can sense its intent to “do away with commercialism” and maintain “professionalism”. Providing a specific solution is not the objective of each article, but it is absolutely the most practical perspective given by professionals. In my thinking, this is the greatest value of China Business Law Journal, and what sets it apart from other platforms. By holding fast to this ethic, it will become even better.

Partners’ Perspective


Charles Guan

Managing Partner of Shanghai Office, Grandall Law Firm

The Regulations for Optimizing the Business Environment passed by the State Council and implemented from 1 January 2020 provide system support for investment and the founding of businesses by market entities in the form of government legislation. They are an important move in promoting fair competition and strengthening market activity, and are a powerful representation of the idea that “the rule of law is the best business environment” at the level of state legislation.

Furthermore, China’s legislation and practice regarding free trade zones are of profound significance, involving numerous regions including Shanghai, Guangdong, Tianjin, Fujian, Liaoning, Zhejiang, Hainan, etc., and promote the rise of a new situation characterized by comprehensive opening up through a more positive and active opening strategy, and the accelerated creation of a new, open economic system.

Li Da

Partner/Management Committee Member, Jingtian & Gongcheng

China

In my opinion, there are two pieces of legislation that were the most important in the past 10 years, both of which were completed in 2019.

The first is the Foreign Investment Law (FIL). This law unifies the three “foreign investment laws” that were previously in effect for close to 40 years, and reconstitutes relevant systems against a background of comprehensive opening, e.g., the establishment of the “pre-entry national treatment + negative list” administrative regime, and the enhancement of the legal protection for foreign investment. The systems under the FIL additionally entrain the repeal, amendment and formulation of a series of laws, statutes, rules, regulations and regulatory documents for sectors relevant to foreign investment. I anticipate that they will have a major impact on China’s further opening up for a long time to come.

The second is the revision of the Securities Law. The current revision required four years, is relatively wide-ranging, with the most significant highlight being the establishment of the registration system, and represents a major system change in capital markets that will experience the most serious tests of the market.

David Liu

Partner, JunHe

There have been numerous major developments in terms of legislation and regulatory measures in the banking and financial sectors in the past decade.

For example, there are the major developments in the non-bank financial institution sector, including relatively muscular legislation governing the establishment and regulation of such non-bank financial institutions as consumer finance companies, factoring companies, small loan companies, and third-party payment companies.

This has greatly increased the entities involved in the finance market, injecting it with a new vigor.

The second is stricter financial regulation. China has strengthened the oversight of the business activities of banking and non-banking financial institutions, including the issuance of the Deposit Insurance Regulations, stricter regulation of peer to peer (P2P) online lending, new regulations on the management of the assets of financial institutions, big data risk control, etc.

These have brought major adjustments to the finance market, and also aim to control financial risks.

Susan Ning

Partner, King & Wood Mallesons

China

Based on my many years of experience in the anti-monopoly field, since the implementation of China’s Anti-Monopoly Law (AML) in 2008, the Anti-Monopoly Bureau of the Ministry of Commerce (MOFCOM), the Price Supervision, Inspection and Anti-Monopoly Bureau of the National Development and Reform Commission (NDRC) and the Anti-Monopoly and Anti-Unfair Competition Enforcement Bureau of the State Administration for Industry and Commerce (SAIC) were respectively responsible for the relevant AML enforcement work, forming the “three dragons ruling the waters” of the law enforcement situation in the anti-monopoly field.

This situation changed fundamentally with the issuance of the state body reform plan in March 2018, as the AML enforcement functions were integrated and folded into the State Administration for Market Regulation (SAMR), producing a three-into-one integration of the AML enforcement authorities.

In July 2019, the SAMR successively issued three sets of rules and regulations complementary to the AML: the Interim Provisions Prohibiting Monopoly Agreements; the Interim Provisions Prohibiting Abuse of Dominant Market Position; and the Interim Provisions Prohibiting Abuse of Administrative Authority to Eliminate or Restrict Competition.

The merger of the AML enforcement authorities and the issuance of the three sets of interim provisions firstly resolve the issues of varying rules and lack of uniformity in law enforcement criteria brought about by the previous division in AML enforcement. Secondly, the merger further improved the complementary anti-monopoly systems, added greater detail to specific rules, and enhanced the operability and transparency of AML enforcement. Finally, with completion of the integration of the law enforcement authorities, and all of the law enforcement tools falling into place, the intensification of law enforcement is sure to follow.

China Business Law Journal, this Chinese-English bilingual business law publication that carries both innovative and practical content, has always left me with a profound impression. In particular, its explication of the rules governing specific legal fields and its market observation give us lawyers great inspiration in our work and benefit us in numerous ways.

Jeffrey Quan

Senior Partner, ETR Law Firm

In the foreign-related legal services field, the Sino-American economic and trade relationship has a profound impact on the economies, trade, investment and financing situations of adjacent countries and regions.

China and the US are frequently in dispute in the economic, trade and investment fields. Furthermore, US regulators have been among the most active regulators globally in the past 10 years.

Recent research from The Wall Street Journal reveals that in the past decade, regulators around the world have imposed fines totaling US$26 billion for violations of anti-money laundering laws, breach of sanctions rules and violation of the know your customer (KYC) principle, with fines for breach of sanctions rules accounting for 56% of the total, and the US accounting for 91% of all fines assessed.

When Chinese enterprises “go global”, they will to a greater or lesser extent be involved in incidents deriving from the US Foreign Corrupt Practices Act (FCPA), and the Committee on Foreign Investment in the United States (CFIUS) and its long-arm jurisdiction. Both lawyers that deal with disputes and those that handle transactions have become increasingly important. The two types of service will increasingly intersect and blend into one another.

Xu Guojian

Managing Partner, Boss & Young

China

Data security is now a very hot legal topic and one of the fields on which I keep a very close eye. In recent years, with the abrupt rise of the cross-border e-commerce industry, the issues of privacy infringement and unfair competition in the course of the cross-border use of data have also progressively come to the fore.

The Information Security Technology – Guidelines for the Protection of Personal Information in Public and Commercial Service Information Systems, issued by the Ministry of Industry and Information Technology in 2013, narrowly interpret the scope of data transmitted across borders as “personal information”.

In 2016, the National People’s Congress formulated and issued the Cybersecurity Law, which expressly subsumes numerous industries, such as public communication, radio and television transmission, etc., within the scope of regulation, and sets out the attendant administrative liability among the legal liability for transmitting data in violation of regulations.

With respect to the designed cross-border transmission of data by key information infrastructure, the Cybersecurity Law requires operators to conduct security assessments. The State Internet Information Office has now issued the Measures for Security Assessments for the Sending of Personal Information and Important Data Abroad (Draft for Comment).

It can be said that, based on the Cybersecurity Law, China has taken the first steps in creating a basic legal regime for the security and protection of data. Of course, it is not without several defects and deficiencies, which will require joint exploration and study in theoretical and practical circles. The current legislation is the first important step taken by China in terms of data security and privacy protection, and we need to gradually improve the regulatory system so as to keep up with the rapid development of science and technology.

China Business Law Journal is a medium with an attitude, retaining the traditional hard copy product, with its reputation as of old, and is a law medium with a great deal of market influence. The publicity services that China Business Law Journal provides to customers are extremely satisfactory and gives them with data feedback in a timely manner, helping them to understand the effect of their brand publicity in the market.

Zhan Hao

Managing Partner, AnJie Law Firm

For me, the merger of the CBRC and the CIRC is of great importance. The appearance of the CBIRC signifies the trend of regulating hybrid finance industries, while additionally presenting a major challenge and change for people and enterprises in the finance market. Furthermore, the appearance of the SAMR and the creation of its new anti-monopoly bureau are of major significance for market competition.

 

Zhang Xiaoman

Partner, Commerce & Finance Law Offices

China

During the past 10 years, the CSRC has continually streamlined administration and delegated authority in the stock offering field, thereby resolving the IPO backlog and greatly reducing the time required for reviewing each offering project.

The Chinese securities offering system is currently in transit from substantive review to a registration system with information disclosure at its core.

With the sci-tech innovation board and the promulgation of the revised Securities Law, the registration system for securities offerings has been rolled out without a hitch.

At present, China’s capital markets have given rise to a new landscape, where a multi-tiered market system consisting of main boards, small and medium enterprises boards, second boards, the sci-tech innovation board, and the New Third Board comprehensively serve the financing and listing needs of enterprises.

In the field of opening up to foreign investment, with the continual reform of the Qualified Foreign Institutional Investor (QFII) and Renminbi Qualified Foreign Institutional Investor (RQFII) systems, as well as the implementation of the interconnection of stock markets, A-shares have been incorporated into the MSCI index and the FTSE Russell index systems.

The Foreign Investment Law and its Implementing Regulations have established a new framework for China’s regulation of foreign investment, the scope of the negative list for foreign investment is progressively narrowing, and the restrictions on the shareholding percentages of foreign-funded institutions are gradually being abolished, demonstrating to foreign investors the central government’s resolve and policy support for greater opening to foreign investment.

I am convinced that with the continued deepening of the opening of China’s capital markets to foreign investment, foreign capital will be able to participate even more easily in China’s capital markets, injecting them with fresh blood and vigor.

The changes and growth in the Chinese legal market in recent years have been extremely rapid. I hope that China Business Law Journal, while continuing to concern itself with existing business fields and maintaining its professionalism and authority, will keep a close eye on new legal market categories, informing more people about new fields, new business models and new legal concepts.