First, we at China Business Law Journal wish our readers and supporters all the very best for 2016! The China market in the past year was overshadowed by a slowing growth rate and capital market volatility, but we believe those were momentary pains marking the advent of a new economic era – one of mature legal frameworks, a balanced industrial landscape and a sustainable growth model.
The grounds for this confidence can be found in our annual award coverage for Deal of the year. In the past 12 months, the China market generated many headline-making transactions. The irresistible momentum of the technology, media and telecommunication (TMT) industry continued. While internet giants expanded their presence in more sectors, new players such as Didi Dache and Kuaidi Dache were integrating their capacities to gain a firm foothold in the market.
Soaring overseas investment is another highlight. A wide spectrum of regions and industries has been targeted. China and Indonesia’s agreement on building the Jakarta-Bandung high-speed rail represents a benchmark for China’s export of high-speed railway capacities. Other overseas highlights include Shanghai Jiuchuan Investment’s purchase of an Israeli telemedicine company, Shanghai Electric Power’s investment in renewable energy projects in Malta, and DMG’s subscription to new shares of a South Korean television producer, to name a few.
Domestically, the merger between China North Rail and China South Rail might be seen as a symbol of efforts to create more competitive giants for the global market. China is also building a stronger banking system. Shanghai Hua Rui Bank was established as one of the first five private banks included in a State Council pilot scheme, while Zhong Yuan Bank was created via the largest reorganization of city commercial banks in China to date.
Eastern stars looks at Chinese investment in Central and Eastern Europe (CEE). Since 2008, China has been building closer co-operation with CEE economies, aiming to lay a firmer foundation for its One Belt One Road (OBOR) initiative. Legal experts anticipate a new wave of investment will be brought from this initiative to CEE countries.
Obstacles should not be trivialized. CEE countries are somewhat over-regulated, and issues like merger control, public tender regulations, labour rules, and health and safety requirements are all likely to pose challenges for Chinese investors.
The domestic market is not an easy place, either. Focusing solely on opportunities may cause investors to miss underlying risks. Bookmarks for compliance includes expert articles on corruption risks, labour law and taxation, all of which are compliance issues that have a great influence on businesses in the domestic market. It’s a must-read for those who want to keep their business safe in China.
