United we stand


Our cover art this month, as illustrated by talented Hong Kong calligrapher Lily Yung, showcases the simple character for merging, integration, togetherness. It’s an appropriate piece of artwork for this edition, for as our cover story, Let’s get together, explains, an era of consolidation may soon engulf China’s legal community. As the cold winds of winter begin to stir, many law firms are wrapping up talks aimed at strengthening their positions for strategies to come, be they international ambitions or plans for domestic expansion.

There is change in the air. We look at the historic evolution of law firms and why they have merged, and compare this with recent examples, such as King & Wood’s union with Mallesons Stephen Jaques. One thing is for sure: one size definitely does not fit all. Oh, and be on the lookout for some big merger announcements in the coming months.

cblj-1210-prologueFrom the legal community to business activity in China, mergers and acquisitions are the order of the day. In Merge Surge, we examine the consolidation that has been prompted by the slowing economy. With the launch of a new round of stimulus measures in the US, expect foreign investors to come calling, but recent developments may prove problematic for them. The National Development and Reform Commission appears to be flexing its long dormant regulatory muscle with respect to approvals for foreign investment projects. But where will that leave the Ministry of Commerce, itself in the process of reworking approval procedures? We look at the pros and cons of these two gatekeepers and explore where the opportunities lie for foreign investors. Domestic M&A activity is also heating up but watch your step and be sure to undertake due diligence.

Finally, outbound deals focusing on central and eastern Europe, appear to have grabbed the attention of Chinese investors following a pledge by Premier Wen Jiabao of a US$10 billion credit line to the region. Want to CEE more? explains that some of this massive purse will be dedicated to loans for joint ventures. We talk to lawyers in the region, where many are guarded in their optimism – understandable given that many of these countries were overlooked by China and others as they developed from collapsed communist regimes into more free market-oriented economies.

Many countries are still refining their paths forward. The Czech Republic, for example, has just announced a new Civil Code, while Romania continues to adjust its own. Hungary is pursuing regulatory reform at a frenetic pace, while Bulgaria’s low tax rates are arousing China’s interest. We talk to the experts on regulatory and business developments from the Baltic states to Bulgaria in a region that seems more than ready to take on its western European neighbours – with the help of some clever investors.