Outbound in full sail

Legal advisers can look forward to larger and more sophisticated transactions involving Chinese investors as acquirers mature and target markets become more receptive, writes George Russell

James Hosking can tell when Chinese investment into the US skyrockets. His litigation docket fills up. Hosking, a partner with the Chaffetz Lindsey firm in New York, points to a correlation between “a wave of investor litigation over the past couple of years” and rising foreign direct investment from the mainland.

Chaffetz Lindsey has represented a number of Chinese clients in dealing with disputes related to investment in the US. “The more controversial growth area for disputes has been with the US government,” Hosking says, citing the use of US President Barack Obama’s rarely invoked executive power to block Chinese-owned Ralls Corporation’s acquisition of wind farms in the state of Oregon.

In addition, a US Congress committee recently issued a warning to American companies against doing business with Chinese telecommunications companies Huawei and ZTE. “The options for litigation to challenge these government actions are limited,” Hosking notes. “We have advised on how Chinese companies can use investment treaties to try to restrict government abuses of power.”