Companies remain cautious about entering China

Author: Jimmie Franklin | Published: 13 Feb 2020

International companies remain cautious about entering China, in spite of newly-announced regulations to open up the market.

The Foreign Investment Law of the People's Republic of China (FIL) hopes to encourage western companies to engage with the state. Among various other initiatives, it aims to instil a level playing field between domestic firms, state-owned enterprises, and foreign businesses.

"Few clients have been moving into mainland China, due in part to the local authorities taking up considerable management time and costs," said UK-based Akin Gump M&A and antitrust partner Davina Garrod.

In-house lawyers agree. "Chinese M&A is down by all metrics, for a couple of reasons," said an M&A lawyer at a UK bank. "More recently, the coronavirus is absolutely going to have an effect on doing business in China. M&A is impossible if you can’t actually go to the country."