Bao Jingxuan: Greasing the wheels

What are the main areas of focus for China Exim's in-house team?

We focus mainly on domestic and international lending, loans related security, trade finance, project finance, shipbuilding finance, syndicated loans and some financial derivatives.

To what extent do you outsource work and to which law firms?

A great deal of China Exim's daily business – such as some loan or mortgage agreements with foreign parties – can be governed by foreign law. In such cases, we normally consult with and outsource to leading international firms and sometimes their local partners. We have instructed many firms over the years, and we manage an internal database that documents firms and the services they offer.

When China Exim does outsource work, what role is played by the in-house lawyer?

We appoint an in-house lawyer from our team to take charge of every case. The lawyer supervises the work of our chosen law firm, and helps to nurture the relationship between the firm and our colleagues. Outside law firms will certainly be evaluated, but each case is also an opportunity for our in-house lawyers to learn from the law firm.

At CLP's China Outbound Investment Summit in Shanghai on September 23, you spoke about encouraging further training for you and your team. Can you elaborate on this?

We are considering co-operating with those international law firms that can provide my team with either short-term training sessions or relatively long-term secondment opportunities. And I am sure that such opportunities can only help promote further co-operation between China Exim and these firms.

What is the main challenge facing you and your team and how do you propose to overcome it?

The business of our Bank has expanded rapidly in recent years. For example, we have diversified into a new variety of loans and even new businesses – such as direct investment in some hi-tech corporations, and acting as underwriters for short-term bonds. This means that our legal team needs to update and develop its knowledge and experience accordingly. A feasible solution to this might be further training for my team and deeper co-operation with leading international law firms.

China Exim financed Sinosteel's bid for Midwest, which was the first hostile takeover by a state-owned enterprise. What legal challenges did this deal present on your side?

We faced two challenges: to comply with the rules of the Australian Stock Exchange (ASX) and to focus on securing approval from the Australian regulatory authorities. As the target company was an Australian-listed corporation, it was necessary to find an eligible Australian law firm that could advise us on transaction structure negotiations with Sinosteel, as well as the application process to ensure compliance with the relevant rules. We made a good choice in selecting Mallesons Stephen Jaques and enjoyed close co-operation with its team.

Australian regulatory approval was key to the success of the deal. While on the one hand we had to do due diligence and pay attention to the borrower's repayment risks, on the other we had to help Sinosteel obtain approval from the Australian authorities. Documentation and timing were crucial in achieving this, and both Mallesons and my team made many suggestions to our corporate department colleagues.

Aside from Sinosteel-Midwest, China Exim plays an increasingly important role in financing Chinese companies to conduct their overseas takeover and M&A deals. For example, we also participated in Lenovo's bid for IBM's PC business, and we financed Chinalco's bid for Rio Tinto and Zoomlion's bid for CIFA in Italy.