October 6, 2006
Conference on China's financial markets, Oct. 12, New York
I recently received the following conference notice:
China's Financial Markets V
THE ASIA SOCIETY
Co-organized with O'Melveny & Myers LLP
Date: October 12th
Time: 9:00 am - 5:00 pm
Location: The Pierre, Fifth Avenue at 61st Street, NYC
Cost: $200 members; $300 nonmembers; students $100
Keynote addresses by:
Dr. Harry Harding, Director, Research & Analysis, Eurasia Group
Catherine Kinney, President and Co-COO, New York Stock Exchange
Anthony Walton, Vice-Chairman, The Americas, Standard Chartered Bank
Fan Bao, Chief Executive Officer, China Renaissance
Kurt Berney, Partner, O’Melveny & Myers
Howard Chao, Asia Practice Chair, O’Melveny & Myers
Wei Christianson, Chief Executive Officer, China, Morgan Stanley
Henry Cornell, Managing Director, Goldman, Sachs & Co.
Robert Delamater, Partner, Sullivan & Cromwell
Lonnie Dounn, Chief Credit Officer, Bank of China
Stephen Green, Senior Economist, Standard Chartered Bank
Nicholas Lardy, Senior Fellow, Institute for International Economics
Qingyuan Li, Senior Researcher, China Securities Regulatory Commission
Richard McGregor, China Bureau Chief, Financial Times
Henny Sender, Senior Special Writer, Wall Street Journal
Stefanie Starna, Partner, Deloitte Touche Tohmatsu
Jing Ulrich, Chairman, China Equities, J.P. Morgan
Anthony Walton, Vice-Chairman, The Americas, Standard Chartered Bank
Jeff Williams, Former President, Shenzhen Development Bank
Victor Gao, General Counsel, China National Offshore Oil Corporation (invited)
Panel 1: Developments in China’s Banking System
• What is the outlook for China’s banking industry?
• Will a market-driven financial sector evolve?
• Are NPLs a serious continuing problem?
• Has the role of the regulators changed?
• What has been the impact of the mega-IPOs by Chinese banks and will these banks emerge as international competitors?
• What role will strategic foreign investors play with Chinese banks?
Panel 2: China’s Domestic Capital Markets
• Will G share reform improve the outlook for China’s A share market in the short and long run?
• How do the G share reforms work? Which companies have been through the reforms and when will the process be complete?
• How will A share markets be impacted by QFII investors or the new policy permitting strategic investors?
• Will the corporate debt market expand through the recent experimentation with bond issuances and securitization?
• The re-emergence of domestic IPOs -- how big an impact will they make and will they really compete with offshore IPOs?
• What is the outlook for Chinese domestic securities firms and will they globalize?
• How are the foreign JV securities firms faring?
• What role has the CSRC played in recent policy and share reforms?
Panel 3: Overseas Listings by Chinese Companies
• What does the pipeline of Chinese overseas listings look like? What sectors and types of companies are hot?
• How important are Chinese IPOs to the global investment banking community?
• Why have many Chinese companies declined to list in the U.S.?
• Will China listings drive the Hong Kong Stock Exchange to the top tier of the international financial markets?
• What is the impact of the G share reforms and re-emergence of listings on Chinese domestic exchanges?
• What will be the impact of the very recent rules requiring CSRC approval for many “red chip” listings? Will we see more H share (Chinese incorporated company) offerings?
• How have Chinese listings performed around the world?
Panel 4: The Rise of M&A in China
• Both strategic and financial investors are eager to acquire Chinese assets, in the face of regulatory complexity, strong competition for good deals, and a government seemingly less eager for foreign investment. Why?
• What sectors are the most attractive? What kinds of companies -- SOEs, private companies, foreign invested companies, domestically listed companies?
• Will the new rules permitting foreign “strategic investors” to buy shares on the A share market encourage foreigners to take stakes in Chinese listed companies?
• The new M&A regulations appear to refocus approval authority for many deals in Beijing, where provincial level approvals had previously been sufficient. What will be the impact on foreign acquisitions?
• Are PE funds being targeted for greater scrutiny?
• Approvals have been held up for several high profile acquisitions. Has the Chinese government started to worry about allowing foreigners to buy China’s “crown jewel” companies?
October 5, 2006
Law on the books vs. law in action
More than one observer has commented that while all societies show a gap between law on the books and law in action, in China the gap often seems wider. Without expressing an opinion on the (ultimately somewhat pointless) empirical comparative question, let me offer an observation about the procedure for obtaining a driver's license in China. This is reproduced (with permission) from an e-mail from a long-term foreign resident of Beijing doing business there.
Mine was a steal at two US silver dollars (a friendly gesture in the spirit of cultural exchange) plus 10 kuai for the "physical" (the first time around, I had to buy someone else's lung x-ray at the gate of Chaoyang Hospital - 2 kuai at the time. The second time I took the exam - because I had inadvertently let my license expire two years earlier - the x-ray requirement had been removed and the "physical" required telling an examiner how tall I am, reading a color chart, and paying 10 kuai). My husband (having put all my speeding tickets onto his license and therefore exceeding the legal number of points by 200%) had to actually take the exam. He studied the average weight of a tractor and the wheelspan of dumptrucks for two weeks and passed the exam, only to find that really taking the test is virtually unprecedented, and the examiners don't know how to save the test results on the computer. So his computerized results disappeared and they just gave him the license.
The road test is a little more complicated to pass. My business partner once paid for about 5 employees to get driving lessons, including himself. He never attended classes. In the end, the employees all failed the driving test but the examiners worried that Max (my then-partner) had not gotten his money's worth, so they gave him a license. Fortunately for the rest of Beijing, he had a driver.
I have another friend, who speaks perfect English and Chinese but is Swiss, who brought an "interpreter" to the exam, claiming he spoke only German. My friend would recite nursery rhymes in German and the "interpreter" would "translate" into the correct answers. This was helpful not only because of the exam but because the friend is colorblind and could not otherwise tell red from green.
My correspondent adds:
This is why I find it difficult to take investment regulations very seriously. It is almost a point of honor for us long-term residents to be able to get out of any legal requirement.
If I may be serious for a moment, lest anyone get the wrong impression from this concluding remark, I should add that in my own experience what may be true for small businesses run by long-term residents is not necessarily true for large multinational corporations advised by large international law firms. American corporations in particular need to worry both about the Foreign Corrupt Practices Act and (even where corrupt practices are not involved) the possibility of getting sued by shareholders should a violation of local law result in a loss to the company. As a lawyer for such a company, I would not relish trying to explain to an American jury that from a legal realist perspective, Chinese laws against bribery and payoffs that were ignored by virtually everyone in China shouldn't count as "real" law. Paradoxically, then, the US legal system may have a bigger role in enforcing Chinese anticorruption laws than the Chinese legal system.
A particularly good article about all this is Patrick M. Norton, "The Foreign Corrupt Practices Act: A Minefield for US Companies in China," China Law and Practice, No. 9 (Nov. 2004), at 15 (available on Westlaw at 2004 WLNR 14891069).
SUBSEQUENT NOTE: After posting this, I discovered that quite by coincidence there is a relevant post on the China Law Blog about whether US companies violate the FCPA and other US statutes in their China operations: click here.
CECC hearing on Human Rights and Rule of Law in China, Sept. 28, 2006
The Congressional-Executive Commission on China held a hearing on Sept. 28th on the above subject, with testimony from Jerome Cohen, John Kamm, Minxin Pei, and Xiao Qiang. The testimony of all four is available at the CECC's web site here; you may also download it in PDF format below:
October 4, 2006
US-China Business Council report on China's WTO compliance
Here is the written testimony of the US-China Business Council, entitled "China's Implementation of its World Trade Organization Commitments," submitted Sept. 28, 2006 to the Office of the United States Trade Representative: Download uscbc-wto-testimony.pdf
October 2, 2006
CLD Consultants (Beijing) seeks program officer
CLD Consultants is a Chinese firm founded by Phyllis Chang, formerly the Ford Foundation's program officer for Law, Rights, and Governance in Beijing. The firm supports non-profit development work in the PRC, primarily in the areas of legal reform, citizens’ rights, governance, and NGO development. They are now looking for a program officer. Please note the following:
This position is aimed at outstanding, reform-minded young Chinese lawyers who are interested in doing non-profit work rather than practicing commercial law. It is based in Beijing.
The Program Officer needs to have at least an undergraduate law degree from a Chinese law school and must have some work or study experience abroad. In addition, she/he needs to speak and write English well, because many of our projects involve cooperation with foreign organizations, donors and experts. As importantly, the Program Officer should be deeply interested in social change and eager to work on projects to promote the country’s legal development and to strengthen the protection of rights. We are looking for a mature person with at least several years’ of work experience, either in China or abroad.
The job announcement and a description of CLD Consultants are available below in Word and PDF format: