Legal Market Overview
The growth level for China’s economy dipped to 6.2% in the second quarter of 2019, its currency sank to an 11-year low in August 2019, and Chinese investment levels in the US have been drastically reduced as a result of the country’s ongoing trade war with the US and the latter’s national security fears over China.
The Belt and Road Initiative has also experienced reduced activity levels. The initiative is a global development and infrastructure strategy adopted by the Chinese government that aims to connect Asia with Africa and Europe, via land and maritime networks. Particular infrastructure sectors of focus have been power, rail and ports, as well as business areas such as real estate, consumer markets and financial services.
The story has not been much brighter on the inbound side, with overseas interest in Chinese companies also dropping when compared with the previous year. However, looking ahead, it is hoped that the new Foreign Investment Law, which will come into force in 2020, will again open up China to foreign business. It will govern the activities of individual foreign investors and foreign-invested enterprises, and promises to create a market environment of stability, transparency, predictability and fair competition for foreign investors.
Areas that have, otherwise, been active for the country’s leading law firms include the Chinese non-performing loan market, convertible offerings, regulatory and compliance matters, real estate deals (including acquisition financing aspects), private equity and hedge funds, insolvency and restructuring.
PRC firms continue to expand domestically and in the region. Fangda Partners showed its dedication to the market with a series of recruitment including hiring capital markets specialist Christine Chen from King & Wood Mallesons, five corporate partners including Colette Pan, Grace Yu and Jian Fang from Linklaters, Yi Chen and Siyuan Pan from Morrison & Foerster LLP and White & Case LLP respectively, as well as regulatory specialist Jason Ma from JunHe LLP and counsel Gil Zhang from an in-house role.
King & Wood Mallesons‘ banking and finance department was joined by a team from JunZeJun Law Offices, which included securitisation and structured finance expert Le Zhang and Ke Song, who has experience in asset securitisation. Jingtian & Gongcheng significantly strengthened its M&A and private equity offering when it hired seven partners, including Victor Wang and James Wang from AllBright Law Offices, and added five partners in its Hong Kong office as a result of a merger with L&C Legal LLP.
Significant news for the legal market on the foreign firms’ side in 2019 saw Herbert Smith Freehills LLP add local law capabilities in mainland China, following the Shanghai Bureau of Justice’s approval of its joint operation with Kewei Law Firm. In January 2020, Allen & Overy LLP became the latest international law firm to form a formal alliance with a local practice. The firm has become one of only seven international firms permitted to integrate China law advice with international legal services through the Shanghai Free Trade Zone’s joint operation model.
Meanwhile, notable recruitment among the legal market’s international law firms include Baker Botts L.L.P. hiring corporate and M&A head Manuel (Bing) Maisog, the former Beijing office head of Hunton & Williams; White & Case LLP recruiting Binga Guo from O’Melveny for its white-collar practice in Beijing; and Shanghai real estate partner Maria Wang being hired from Morrison & Foerster LLP by Fangda Partners, which itself experienced the departure of competition law expert Vivian Cao for the newly established Beijing branch of Linklaters‘ joint venture operation firm, Zhao Sheng Law Firm.
Other headline moves include Paul, Weiss, Rifkind, Wharton & Garrison‘s China practice managing partner Jeanette Chan departure to Fintech unicorn Airwallex; Simmons & Simmons‘ Beijing office head Eric Lin exit for Reed Smith Richards Butler; and Cleary Gottlieb Steen & Hamilton‘s chief representative in Beijing Ling Huang join King & Wood Mallesons, which also recruited Herbert Smith Freehills LLP‘s former international arbitration and dispute resolution partner Jessica Fei.