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

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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.