Interview with Tony Dong

By: He Ran and Zhang Tianhui of King & Wood‘s Publications

Unlike its invisible counterpart that made 18th century economist Adam Smith famous, the Chinese government’s use of taxation is one of the most ‘visible hands’ controlling the Chinese domestic economy today. In this article, King & Wood partner Tony Dong gives his opinion on new tax regulation encouraging M&A, structural reform and restructuring activity found in the recently promulgated Decree No. 27.

Continue Reading The Visible Hand: Taxation and Economic Control

By: Susan Ning, Ding Liang and Huang Jing

On 22 November 2010, the National Development and Reform Commission (NDRC) announced1 that it was in the process of determining remedies against eight oil companies for selling diesel above the maximum prices set by the Government.

The eight companies are: (a) Shaanxi Petroleum Chemistry Industry Trade Company; (b) Shaanxi Yanchang New Resources Co., Ltd; (c) Shanxi Yanlian Petroleum Chemistry Co., Ltd Xi’an Supply Store; (d) Shandong Jincheng Petroleum Chemistry Group Company; (e) Jiangsu Province Lianyungang PetroChina Sales Co., Ltd; (f) Sinopec Wuhan branch company; (g) Sinopec Luoyang branch company; (h) PetroChina Wuhan branch Company. [Note: The companies listed in (e) to (h) are State Owned Enterprises (SOEs).]

Continue Reading Eight Oil Companies in Trouble for Breaching Price Law

By: Zhang Xiaomin, Yang Xiaoyu and Yang Wei

Recent government policy adjusting the number of central state-owned enterprises is likely to lead to numerous new opportunities for law firms hoping to participate in large scale restructuring and capital markets transactions. The Stated-Owned Assets Supervision and Administration Commission of the State Council (SASAC) recently stated that by the end of 2010, the number of central state-owned enterprises must be reduced to 80-100, of which 30-50 should be large internationally competitive corporations, and that by 2015, there should be no more than 1000 regional stated-owned enterprises.  Industry insiders expect the recent policy change to lead to widespread potential for large scale securitization and IPO projects.

Continue Reading New Government Policy Spurs on SOE Restructurings and Listings

 By Susan Ning, Tao Huang, and Yang Yang

As was the case throughout the world, the global economic downturn beginning in 2008 caused many in the Chinese market to face difficulties in fully performing executory contacts which had been formed prior to the crisis. As such, many parties to such contracts requested modification or even rescission of their contracts under the changed circumstances. As a response to these trends, the Judicial Interpretation on Contract Law II was issued by the Supreme People’s Court of the People’s Republic of China (hereinafter the “SPC”) to further clarify certain legal rules under current Chinese Contract Law . In particular, Article 26, Chapter 4 of the Judicial Interpretation on Contract Law II (hereinafter “Article 26” or the “Fundamental Change in Circumstances” Provision") provides guidance on a party’s right to modify or rescind a valid contract when a Fundamental Change of Circumstances occurs after contract formation. A Fundamental Change of Circumstances in this regard is differentiated from a force majeure event and does not cover changes that may arise from normal commercial risks, and under which the purpose of the contract would be frustrated or performance will result in extreme unfairness.

Continue Reading New Provision Could Change Contract Law in China but Judges Remain Conservative

By: Susan Ning, Shan Lining and Angie Ng.

On 12 November 2010, Professor Huang Yong (University of International Business and Economics) gave some comments to the media1 on the QQ-360 disputes (see our previous article entitled “The QQ/360 disputes”).

Professor Huang made the point that industries like the technology and internet services industries develop and change so quickly that by the time either party (i.e. QQ or 360) or a third party brings a claim (pursuant to the Anti Unfair Competition Law (AUCL)) to the courts and receives remedies (e.g. damages), the industry might have changed so much that either one or both of these parties might have been “driven” out of the industry. By contrast, in his comments, Professor Huang spoke about “public enforcement” being a more “efficient” route of enforcing the AUCL.

Continue Reading Private vs public enforcement pursuant to the Anti-Unfair Competition Law and Anti-Monopoly Law

By: Susan Ning, Ding Liang and Angie Ng.

Recently, the disputes between Tencent’s QQ and Qihoo’s 360 software have caused quite a stir in the press (see our article entitled “QQ vs 360 – an anti unfair competition case”.

We set out the “whos”, “whats”, “where” and “when” or the background to these disputes. We also provide our preliminary views or analysis re these disputes vis-à-vis the Anti Unfair Competition Law (AUCL) and the Anti-Monopoly Law (AML).

Continue Reading The QQ / 360 Disputes – Who, What, Where, When and Preliminary Antitrust Analysis

Interview of Roy Zhang of King & Wood’s Banking Department by Zhang Tianhui and He Ran of King & Wood’s Publications Group

Financing is a critical consideration in M&A transactions. For a long period of time, financing large scale strategic M&As of listed companies in China has been a bottleneck. As such, it is important for companies to study successful M&A experiences from abroad and develop additional venues and tools for financing and venues for such transactions.

Continue Reading Financing Mergers & Acquisitions in China Today

By: Susan Ning and Shan Lining.

On 30 October 2010, it was reported in the press1 that the People’s Court has thus far accepted 11 antitrust cases (for the period 1 August 2008 to June 2010). Out of these 11 cases, 10 were antitrust civil cases (see our previous article entitled Two Years on, Ten Antitrust Private Actions) and 1 was an antitrust administrative action.

Continue Reading 11 Private Antitrust Cases Lodged; Judicial Interpretations Coming Up

By: Susan Ning and Liu Jia.

On 3 November 2010, it was reported in the press1 that the Changsha Yuelu District People’s Court (in Hunan province) accepted the court’s first private antitrust claim. The antitrust claim was formally accepted by the court 1 November 2010 and is an abuse of dominance case.

Continue Reading Hunan Province’s First Private Antitrust Case