CCPIT of­fers guide­lines for firms in­vest­ing over­seas

China Daily (Canada) - - LIFE - By ZHONG­NAN zhong­nan@chi­nadaily.com.cn

The China Coun­cil for the Pro­mo­tion of In­ter­na­tional Trade will re­lease an ex­port mar­ket guide­line by the end of this month to as­sist the coun­try’s for­eign trade, es­pe­cially in emerg­ing mar­kets such as Latin Amer­ica and Africa, of­fi­cials said onWed­nes­day.

“The guide­line will help Chi­nese man­u­fac­tur­ers get a bet­ter knowl­edge of global mar­kets from de­vel­oped economies to de­vel­op­ing mar­kets. Mar­ket de­mand, and the political, le­gal and busi­ness en­vi­ron­ments will all be in­cluded to help them pre­vent risks, and help them in­vest in new mar­ket des­ti­na­tions,” said Lin Shun­jie, di­rec­tor-gen­eral of depart­ment of trade and in­vest­ment pro­mo­tion at the CCPIT.

Lin’s com­ments came af­ter China’s for­eign trade vol­ume reached $3.96 tril­lion in 2015, down 8 per­cent year-on-year, the govern­ment an­nounced on Tues­day. The coun­try is also con­fronting trade pro­tec­tion­ism with trade rem­edy mea­sures against Chi­nese prod­ucts ris­ing sig­nif­i­cantly last year, es­pe­cially from de­vel­oped economies in the Euro­peanUnion and theUnited States.

Lin said the agency will fur­ther lift the level of com­mer­cial le­gal ser­vices. The CCPIT will build a “big le­gal” ser­vice sys­tem to im­prove com­mer­cial le­gal work abroad and es­tab­lish com­mer­cial le­gal work agen­cies in key in­dus­tries and coun­tries, in­clud­ing the US, Brazil and In­dia, as well as build­ingChina into an in­ter­na­tional ar­bi­tra­tion cen­ter.

Ge Xiangyang, an in­vest­ment­lawyer at Bei­jing of­fice of the Hong Kong-based global law firm Mayer Brown JSM, said un­like in ma­ture mar­kets such as Ger­many or the United King­dom, con­duct­ing merger and ac­qui­si­tion ac­tiv­i­ties in Latin Amer­i­can or African coun­tries may cause big­ger risks, as many Chi­nese com­pa­nies are not fa­mil­iar with the lo­cal le­gal and com­mer­cial en­vi­ron­ment and prof­itabil­ity mod­els.

The firm has com­pleted more than 12 large-scale out­bound deals in the fields of en­ergy, min­ing and in­fra­struc­ture for Chi­nese com­pa­nies in­clud­ing CITIC Group, China Na­tional Off­shore Oil Corp and China Min­metals Corp in both Africa and Latin Amer­ica over the past decade.

To pro­tect their tax rev­enue, many coun­tries in Africa and Latin Amer­ica do not ac­knowl­edge the le­gal sta­tus of com­pa­nies reg­is­tered in the Cay­man Is­lands, and tribal rights and in­flu­ence re­main pow­er­ful in many African coun­tries such as Ghana, Nige­ria or Benin, which have caused dif­fi­cul­ties for Chi­nese com­pa­nies to in­vest in th­ese des­ti­na­tions.

Other chal­lenges in­clude a lim­ited ca­pac­ity to or­ga­nize and co­or­di­nate com­mer­cial, le­gal, fi­nan­cial and hu­man re­source dili­gence.

“It is also im­por­tant to carry out in­ter­na­tional fi­nanc­ing busi­ness to di­ver­sify mar­ket chan­nels, in­stead of re­ly­ing over­whelm­ingly on do­mes­tic pol­icy banks such as China De­vel­op­ment Bank and the Ex­port-Im­port Bank ofChina,” said Ge.

Dai Guanchun, a part­ner at Jing­tian & Gongcheng At­tor­neys at Law, an­other Bei­jing­head­quar­tered law firm, said be­cause of dif­fer­ent lan­guages and mind­sets across th­ese re­gional mar­kets, re­li­able ad­vice and au­then­tic in­for­ma­tion from lo­cal fi­nan­cial and le­gal pro­fes­sion­als are of paramount im­por­tance for over­seas com­pa­nies do­ing busi­ness in Africa and Latin Amer­ica.

“Chi­nese com­pa­nies al­ready have a high chance of se­cur­ing con­tracts for in­fra­struc­ture and in­dus­trial projects as they en­joy the sup­port of fi­nan­cial in­sti­tu­tions such as the Asian In­fra­struc­ture In­vest­ment Bank and the Silk Road Fund, as well as gov­ern­men­tal agree­ments. They should boost their chances even fur­ther by re­ly­ing on ex­pe­ri­enced le­gal brains,” said Dai.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.