cross border investment

By Jonathan Grant, Wang Kaiding, Intan Eow and Boer Ma King & Wood Mallesons

In China’s push to create an open yet orderly economy, the National Development and Reform Commission (NDRC) has issued new rules on Chinese outbound investments, effective from 1 March 2018.

In an attempt to refine the rules following the Chinese government’s tightening of capital controls last year which affected the majority of Chinese outbound investments, the new Administrative Measures for Enterprise Outbound Investment (Regulation No.11) provide for clearer and more streamlined regulation of Chinese outbound investments, but also place more scrutiny on investments that may be contrary to China’s economic policies.  
Continue Reading Refining the NDRC rules on Chinese outbound investments

By Andrew Fei King & Wood Mallesons’ sydney office

On 18 August 2017, as part of the Chinese government’s ongoing efforts to regulate overseas investments by Chinese companies, China’s State Council published a set of investment guidelines (Guidelines) formulated by four key regulators – the National Development and Reform Commission, Ministry of Commerce, People’s Bank of China and Ministry of Foreign Affairs (collectively, PRC Regulators).
Continue Reading China issues guidelines on overseas investments

By Max Bonnell, Ruimin Gao and Erin Eckhoff  King & Wood Mallesons’ Sydney office.

bonnell_mChina’s Belt and Road Initiative is a visionary policy that aims to connect over 60 countries in Asia, Europe and Africa along five main routes of the Silk Road Economic Belt and 21st Century Maritime Silk Road. Affecting a total population of some 4.4 billion (approximately 63% of the world’s population) and generating an aggregate GDP of over USD20 trillion (approximately 30% of global GDP), it is an ambitious framework that is projected to see significant numbers of infrastructure and other projects set up under its auspices. However, with such strikingly ambitious vision comes unchartered risks.
Continue Reading Managing Risk along the Belt and Road of Opportunity

By Dr. Sandra Link, LL.M.   King & Wood Mallesons’ Frankfurt office.

link_sDuring the last years, the number of Chinese outbound transactions to Germany have increased considerably and reached a record high in 2016. M&A transactions are quite complex processes, presenting a wide range of potential pitfalls for both buyers and sellers. Often, Chinese investors are not familiar with the particularities of the European market. Against this backdrop, the need to mitigate transactional risk is increasing in particular for Chinese investors.

The use of Warranty & Indemnity (W&I) insurance, has become commonplace in the US and European M&A markets over the last years. Whilst the product is less well-known in the Chinese market, the gap is starting to close and a leading W&I insurer has already established a Chinese desk in Germany to meet the special needs of Chinese clients. With SASAC having emphasized the importance of risk insurance in the context of outbound investments for SOEs in their regulation of 7 January 2017, we expect the importance of W&I insurance for Chinese outbound M&A to further increase.
Continue Reading W&I insurance for Chinese investors in Germany

By TIAN Wenjing ZHANG Chen Xu Yue

tian_wen-jingAccording to statistics released by the National Bureau of Statistics, outbound direct investment from China to Russia was USD 2.961 bn in 2015, up by 367.3% year on year. By the end of 2015, the total amount of Chinese FDI in Russia was USD 14.02 bn, second among all 64 “One Belt, One Road” countries by value. As shown by the “Belt and Road Initiative Big Data Report (2016)” compiled by the Leading Group Office for Promoting “Belt and Road” Construction, Russia tops the list of “One Belt, One Road” countries in terms of cooperation-worthiness. With its vast domestic market, stable political environment, complete infrastructural network and friendliness towards investment from China, Russia is obviously a big magnet for Chinese investment and shows enormous potential.
Continue Reading Investing in Russia? – Lessons learnt from the Yukos and Sanum Cases

By Mark Schaub, Chen Bing and Martyn Huckerby  King & Wood Mallesons’ Corporate & Securities group

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International health food companies and infant formula food suppliers rejoiced on March 17, 2017, when the China Ministry of Commerce (“MOFCOM”) confirmed that the current supervision model will likely be adjusted for cross border e-commerce retail imports (“CBEC”). The announcement advised that the new model, which will take effect from January 1, 2018, will apply to 15 pilot zones.

The mood was markedly different back in April 2016, when several PRC authorities officially issued new policies regulating cross border e-commerce. The most concerning aspect of the April 2016 measures was that a range of products, including health food, infant formula, cosmetics and medical devices, would need to be registered or filed with the PRC authorities. These  polices caused panic in the market and resulted in a sharp drop (almost one third) of CBEC business revenue. A later notice in May 2016 granted a grace period for the implementation of registration and filing requirements until May 2017, which was extended by MOFCOM in November until the end of 2017.
Continue Reading Respite or False Dawn: MOFCOM Hints at Softening of Tough PRC E-commerce Policies

By James McKenzie and Daisy Mallett, King & Wood Mallesons

A guide to ISDS in the China-Australia Free Trade Agreement: A hollow promise or an answer to ISDS’ critics?

The China-Australia Free Trade Agreement (ChAFTA) is here. The landmark agreement was signed between the governments of Australia and China on 17 June 2015,