China

Why trade or invest in China?

“(…) The world desperately needs engines of growth right now, and fortunately - with continued strong and pragmatic economic policy making - China can provide that impetus.

China is now the world's second biggest economy and the largest exporter of goods, with 9.6% of the global share, followed by Germany, the United States and Japan.  China has an income per capita of $4,400 in current dollars and is well established as a high-middle income country. China's foreign reserves are the largest in the world.  Nationally, China must tackle what amounts to a triple imbalance.

Engineering a shift towards domestic demand and moving from an over-reliance on export-led growth represents the first rebalancing.  The process should be balanced between consumption and continued strong growth in investment.  The latter is critical for industrial upgrading, raising incomes, as well as developing "green economy" sectors and protecting the environment.

The second rebalancing entails a structural transformation to reduce income disparities. In spite of the general improvement of living standards, China has shifted from a relatively egalitarian society in 1979 to a country with alarming income inequality. The Gini index [a common measure of social inequality] reached 41.5 in 2005, approaching the level of Latin American countries. The widening of disparity may threaten social stability and hinder economic growth.

The third imbalance relates to environmental costs that have accompanied rapid growth. China needs to shift its stance vis-a-vis short-term growth and long-term environmental sustainability. The future structure of production must shift towards cleaner technologies.  As a result of superior growth in the developing world, we are now in a multi-polar growth world, with economic weight shifting from the G7 economies [of seven leading industrialized nations] to developing economies.

China's contributions to the multi-polar world are manifold. For high-income countries, China's growth will expand markets for their capital goods and intermediate goods exports.  Many developing countries are still major producers of agricultural and natural resource commodities. Chinese consumption and production growth will continue to support adequate commodity prices and thus help these exporters.

In addition, the Chinese government and Chinese firms will also provide funds for natural resource and infrastructure investment in emerging markets and low-income countries. This is already happening, and it is likely to continue. In particular, there is a growing role of Chinese finance in the Africa region - the developing region with the most constrained access to finance.  Also, as China undergoes industrial upgrading, it will leave space for other developing countries to enter the more labor-intensive industries.

Chinese enterprises are expected to relocate their existing production to other lower wage countries (for example Vietnam) as they upgrade to higher value-added industries - just like Japan and East Asian economies did a few decade ago.  The difference is that, because of its size, China may become a "leading dragon" for other developing countries instead of a "lead goose" in the traditional flying geese pattern of the international diffusion of industrial development (..)“

Some particularities of the Chinese law and the Chinese legal system you should know

We reveal that mediation remains under-utilized in practice, despite being widely supported and recognized as having the potential to resolve disputes in a quick, cheap and confidential way.  Many clients see mediation undertaken without any real intention to settle.  This is a missed opportunity to front-end the settlement of disputes.  Whether you litigate, arbitrate, or have never yet been embroiled in a formal dispute, we recommend you to consider mediation as dispute resolution tool in China.

A-Law law firm China

A-LAW Chinese team work both on inbound and outbound guidance of investors and trade professionals.  Under the Go Out policy of the Chinese government, an increase of interest is noted in investments and setting up of businesses in Europe. The skilled Chinese entrepreneur is willing to consider the challenge and run his successful business in Europe.

Belgium in particular is seen as a most promising market for setting up business and further exploration of the European market.  A-LAW presence in West, central and east Europe is a further driver to take Belgium as the prime location.  Chinese government plans to make Antwerp an important hub for China trade with on the one hand the new silk road rail connection to inland china and on the other hand the maritime link to Africa, is seen as THE opportunity for Chinese businessmen to establish their businesses in Belgium.

We offer international and local clients access to one of the leading capital markets/M&A teams in mainland China, and a China investment team that advises Chinese state-owned enterprises and corporates on outbound M&A.  We also have an on-the-ground dispute resolution team offering international dispute resolution and arbitration services in China, including due diligence.

A-LAW lawyers offer expertise in establishing representative offices in Europe for Chinese regional governments, setting up corporate structures in china for companies active in the agricultural, food, chemical, IT, textile, machinery and so on.  Recoveries including online purchases made by European traders from Chinese factories (quality and non-conformity) is another growing area of support as well as assistance in the negotiation of exclusive agent, distributor and license agreements and assistance during IPO procedures.  Due diligence and draft of IP protection preventive plan has proven of great importance to A-LAW customers.

We have established relationships with central and regional government authorities, state-owned enterprises and regulators.  We advise multinational corporations, financial institutions, regulatory bodies, local corporates and PRC private and state-owned enterprises.

Discover A-LAW area of support INVESTMENT, TRADE DISTRIBUTION AND FRANCHISE.