Opportunity amid crisis

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The global economic climate doesn’t look good in 2012.

However, for those participating in PRC-related legal work, there is opportunity amid crisis.

Take Hong Kong as an example. A high proportion of foreign-related contracts in the PRC specify Hong Kong as the seat of arbitration. This trend is expected to continue as foreign lawyers and businesspeople are not familiar with the PRC legal system and how it operates in reality. To save time and cost, and perhaps to avoid opening a can of worms, it naturally follows that one might opt for Hong Kong for speedily resolving commercial disputes.

In Render unto the mediator, on page 69, we look into some problems of the current mediation-arbitration system in Hong Kong. Do these problems cast doubt on the current system and make Hong Kong a less attractive and less competitive place for arbitration? A definitive ruling by the Court of Final Appeal in a recent controversial case would help to clear the doubt.

Given that Hong Kong has a well-developed legal system and the geographical advantage of connecting with the mainland, we believe that Hong Kong will remain a strong and competitive centre of arbitration for PRC foreign-related contracts within the region.

In It’s time for Africa, on page 51, we look at the burgeoning Chinese investments in Africa. “Africa is a promising partner and stepping stone for China,” says Amie Bensouda of Amie Bensouda & Co in Gambia.

Yet, choosing the right project and making it work is still a challenge. Last year was particularly difficult for PRC companies in Africa due to revolutions in some African countries and anti-China sentiment in others. Chinese investments were not warmly received by some people.

For outbound investment to be smooth and successful, Chinese companies need to have a “profound understanding of cultural traditions that make each country unique,” says Rita Assis Ferreira, a senior associate at PLMJ. Chinese companies shouldn’t rely too heavily on political and personal relationships. Instead, they should pay more attention to legal compliance to safeguard their interests.

Many Chinese companies are getting it right in Africa and their achievements are among those highlighted in China Business Law Journal‘s annual Deals of the Year report (page 19). This special coverage celebrates the most significant China-related transactions of 2011 and pays tribute to the legal innovation and practical expertise that guided each deal to fruition.

While celebrating the achievements of 2011, we also look forward to the opportunities that 2012 will bring. And in this spirit we would like to wish all our readers a happy, healthy and successful year ahead.