against the background of the Belt and Road Initiative (BRI), how are energy projects to go global? Equity partner Wang Jihong and partner Hao Li with Zhong Lun Law Firm, held discussions revolving around this topic with executives of logistics, investment banks and energy companies during the CBLJ Forum 2019.
Wang said that during the process of BRI projects, she felt the irreplaceable nature of Chinese lawyers. Taking Chinese state-owned enterprises (SOEs) as an example, she said that the global assets and projects of SOEs were under the supervision of the government, so every overseas investment project would encounter occasional visits from inspection teams of the Central Commission for Discipline Inspection, which would require expertise from Chinese lawyers to deal with. “From my personal experience, the whole project is inseparable from lawyers, we almost communicate with the leaders of overseas projects in minutes, 24 hours a day on standby,” she said.
Leslie Zhang, deputy general manager and general counsel of the Legal Department of United Energy Group, said that the risk rating of certain countries along the Belt and Road was not very high, which presented certain obstacles to project financing. However, when certain large Western enterprises encountered compliance and other such issues, making it impossible for them to enter a certain country’s market, this presented an opportunity for Chinese enterprises. “Chinese buyers have become an important global force,” he said.
Zheng Kai, managing director, Corporate Finance and Capital Markets of CLSA, noted that Southeast Asian nations along the Belt and Road, such as Vietnam and the Philippines, had a major population advantage, which made them large potential markets for new energy enterprises. In terms of financing, he recommended that enterprises striving to globalize should consider establishing overseas financing platforms, which would provide them with strong support for their development.
Speaking about the rise of Chinese firms during the past two years, he said: “In the course of Chinese enterprises going global, we have found that Chinese law firms have also gradually accumulated service capabilities, and Chinese investment banks have also participated in the offshore service investment field, so I feel that this a gradual [development] process.”
Gao Wei, managing director of Sinotrans Air Transport Development, has observed that essentially all Hong Kong listing projects are now handled by Chinese investment banks and law firms, and certain private enterprises have moved their headquarters to Hong Kong, realizing an international posture.
The media coverage on the roundtable conference is organized based on shorthand transcripts. Any remarks by the guest speakers and scholars represent their own opinions, and not the opinions of the organizations to which they belong. Read the full report of the CBLJ Forum 2019 here.