To further stabilize its financial system and prevent risks from spilling over,the Chinese government is moving towards segregating soured loans at the
regional level from national debt disposal. In an attempt to address risks, China
is clarifying its so far inefficient debt rules regarding their treatment of national
and local debt. This is a clear attempt at rectify the financial risks posed by
China’s previous state-directed approach to 10.7 trillion yuan ($1.7 trillion) in
bad debts brought upon by local governments. Beginning in 2008, amidst the
global financial crisis, Chinese local governments borrowed up to 4 trillion yuan
from Beijing in order to fund their economic stimulus plans. (more…)
Jiun-wen Teoh February 22nd, 2013
Chinese Securities Journal has reported that China is beginning to run background checks on the 800 plus companies that have applied for domestic share sales in effort to shorten the IPO waiting list and relieve pressure on the stock market. The Chinese Securities Regulatory Commission (CSRC) has been examining the application materials and financial authenticity of IPO applicants, and will disqualify any unsatisfactory applicants. Due to concerns of the strength of the Chinese stock market, the CRSC wants Chinese companies to sell bonds, list overseas, or trade on over-the-counter equity markets as regulators to control supply. The queue means that Chinese companies may have to wait up to or over five years to launch domestic IPO, a condition that Ernst & Young believes may turn some to Hong Kong.
Audrey Yung January 4th, 2013
Posted In: Regulatory Changes
For some time now, China, as the world’s second-largest economy and burgeoning superpower, has been executing their generational change in leadership and results were unveiled in mid November. Many thought the composition of the Standing Committee might signal China’s continued liberalization and globalization or a retrenchment of hard line policies of the past. The Standing Committee shrank from nine to seven members, and it is split in terms of political leanings with Hu’s reformers controlling three seats and four seats held by Jiang conservatives. With the speed of changes both in China and the rest of the world, it remains to be seen which faction will eventually not only win out but how these factions will lean and their impact on the legal industry in China. To find out more about such speculation, please read our upcoming post on the topic.
Xi Jinping is taking over as Party boss for the departing Hu Jintao. In March, Hu Jintao, who had to wait two years for Jiang Zemin to vacate as head of the military, will cede Xi Jinping, as the military and the party leader. This will arguably be the most orderly and voluntary transition of power in China’s modern history. (more…)
Dawn P. Robertson, Esq. December 7th, 2012
As mentioned in the Wall Street Journal today, China has taken new steps to loosen restrictions on the range in which the yuan trades against the US dollar. The Chinese Central Bank still maintains a relatively tight grip on the yuan by setting a daily “parity” rate for trading the yuan against the US dollar. China until today had allowed the yuan in daily trading to increase or decrease from the party rate by no more than .5%. The changes which went into effect today allow the yuan to fluctuate up to 1% from the parity rate.
Joshua Flagg April 16th, 2012
In November of 2011, the free trade agreement between South Korea and the United States was finalized allowing U.S. firms to finally be able to open offices in South Korea. Shortly after the announcement of this agreement several American law firms announced plans to open offices in Seoul.
One firm planning to open a Seoul-based office within the first half of 2012 is Cleary Gottleib Steen & Hamilton. Partner Yong Guk Lee and Counsel Jan Hoon Choi from Cleary’s Hong Kong office plan to relocate to this office and will be the first to man this office. They plan to move Cleary’s 17-lawywer Korea team from Hong Kong to their new Seoul office within the next 2 to 4 years.
Cleary’s work in Korea includes assisting Korean clients with capital raising and international investments, as well as assisting non-Korean clients with their investments in Korea. They have assisted non-Korean clients such as Goldman Sachs, TPG Newbridge, and the Carlyle Group in their direct investments in Korea. They have also assisted Korean clients such as Daewoo Motor, Kookmin Bank and Hyosung Corporation with foreign investments, and advised large-scale international debt restructurings for Korean clients SK Global, Daewoo Group, and the Korean banking sector. Cleary has also represented the Korea Development Bank in its SEC registered offering of $1 billion 3.875% notes due in 2017. (more…)
Melissa Katsoris February 22nd, 2012
Coming into effect earlier in June, the new Hong Kong Arbitration Ordinance could allow Hong Kong to become a new center for domestic and international arbitration. The new ordinance eliminates the old difference between domestic and international arbitrations, which will now be based on the Model Law governed by a unitary regime. The changes are said to make the arbitral process in Hong Kong more efficient.
Besides establishing certain minimum standards for national arbitration legislation, Model Law also designates circumstances where the domestic courts can intervene in the arbitral process, as well as providing parties an outline framework, which can be adopted in the absence of agreement. The new ordinance also prohibits parties from disclosing information relating to the arbitral proceedings.
Andrew Magee June 23rd, 2011
Ogier guided the recent approval of Guernsey as an acceptable overseas jurisdiction for listing marks in the Hong Kong Stock Exchange. This is the second time in the past two years that the HKSE has approved an offshore jurisdiction. This decision is following the path of the 2009 approval for British Virgin Islands incorporated vehicles to list on the HKSE. Winsway Coking Coal Holdings, a British Virgin Islands-incorporated company, was listed on the HKSE main board at a US $661 million offering. Ogier partner Caroline Chan and Hong Kong based partner Marcus Leese guided the application on behalf of the Guernsey Government. It will provide great opportunity for Guernsey lawyers to expand their practice in Asia as well as giving companies that are considering doing an IPO bigger options.
Isabelle Nadler June 6th, 2011
Posted In: Regulatory Changes
Through new changes made by the National Intellectual Property Strategy Office, a new basis for IP lawyers in China will be created. There are 6 main sections for change in the newly released ‘2011 Action Plan on China’s Intellectual Property Rights Protection.’ Changes will be made with respect to enhanced IP training, revision and formulation of IP laws, increased enforcement of IP related law, development of IP services as well as a promotion of IP culture through exchange and expansion. Lawyers see the changes as a solid opportunity for growth in IP protection. As reported in the ALB Centre, by Cecilia Liu, Carol Wang said “Despite previous guidelines/action plans for IP right protection released by the Chinese government, this year’s action plan has provided greater clarity on a variety of levels.” (more…)
Isabelle Nadler May 31st, 2011
Posted In: Regulatory Changes
On Tuesday, July 27, 2010 at 5 p.m. London time, the law firm Reed Smith will host a teleseminar focused on the recently passed Dodd-Frank Wall Street Reform and Consumer Protection Act. The panel, consisting of a number of industry experts with substantial experience in both the financial and physical commodities markets, will include internationally acclaimed derivatives market expert, Dr. Craig Pirrong. In addition to providing an overview of the new derivatives laws, including the changes to the regulatory and commercial environment of the U.S. derivatives market, which are likely to be largely replicated in other markets, the panel will discuss the rule-making process that will further shape the industry over the coming years. (more…)
David Futterman July 23rd, 2010
On April 30, 2009, China’s State Administration of Taxation announced that, retroactively effective to January 1, 2008, seventy percent of a venture capital enterprise’s total investment can be counted as a deduction from its taxable income. The applicable investments are limited to equity investments in private small- and medium-sized high-tech and new technology projects by venture capital enterprises once the two-year equity holding is reached. The deduction can also be carried over to the following year if the amount exceeds the tax bill in the current year.
However, this new preferential tax measure, which undoubtedly benefits venture capital investors, is subject to specific provisions. For example, the investing enterprise’s business scope must comply with the Interim Measures for the Administration of Venture Capital Investment Enterprises. Also, the venture capital enterprise must be registered as a professional corporate entity engaging in venture capital investment. Finally, although the measure stipulates the required conditions and procedures for completing a filing, the
Ministry of Finance, and the tax authorities, may impose further conditions.
David Futterman July 9th, 2010