Last year China received around $50 billion in foreign direct
investment, more than any other country. Yet the market, with a
population in excess of 1.2 billion, is still largely untapped.
International companies and financial institutions are queuing
up to change this. The opening of various sectors since December
2001, in line with China's World Trade Organization commitments, is
giving foreigners new ways and more confidence to enter the
financial services markets. But obstacles remain and real
liberalization is slow.
Landmark changes in recent months to allow foreign investors to
buy Chinese companies and foreign brokers to trade in domestic
shares and bonds, still impose restrictions. The amount and timing
of investments, as well as repatriation, may slow reforms. Clarity,
fair application and flexibility are needed.
A new bankruptcy law and renminbi convertibility will take
longer. Until then, structuring securitization and project finance
deals, for instance, will be tricky. And without far-reaching
banking reforms to remove - or at least ease - the bad debt burden,
the entire financial system is under threat.
Even with internationalized practices at Chinese companies,
foreign investment and complex financings using innovative deal
structures, market participants question whether the regulators are
up to the challenge. Either way, investors must be cautious.
It is in the context of this uncertainty that The IFLR Guide
to China has been produced. The mainland's rapidly changing,
yet complex, economic and regulatory landscape can make it
difficult to keep up-to-date with how developments affect business
In the first section of the guide, IFLR gets the views of
some of the players in the investment banking community and finds
out their strategies and predictions for China.
In the second section of the guide, specialist practitioners
from some of the leading Chinese and foreign law firms provide
detailed analysis on the key legal and regulatory trends and why
they matter. There is also discussion on issues still to be
resolved and what in-house counsel should look out for.
I hope you will find The IFLR Guide to China a useful
tool and one that you will refer to often.
International Financial Law Review