In the news: Hedge funds legally recognised, aviation arbitration court set up and another foreign hospital moves in

Uniform regulatory regime paves way for hedge funds

Hedge funds, which have long operated in a grey area in China, have been officially recognised by regulators after the CSRC issued rules to oversee the fund management industry, which is still relatively immature. This is expected to propel the industry's expansion and lead to more sophisticated trading strategies. Hedge funds in China manage Rmb539.4 billion (US$88.2 billion), a figure that is forecasted to double to Rmb1.1 trillion by the end of 2018.

Source:
The Wall Street Journal

This WSJ article focuses mostly on hedge funds, but the new private investment funds law actually covers all private funds, including private equity and venture capital funds as well. The original law for the fund industry was introduced a decade ago and applied only to publicly offered mutual funds. Private funds were left without guidelines and only last year were laws issued to recognise the existence of hedge funds as a legal entity. Two months ago the CSRC released more detailed rules for private funds to lift restrictions and streamline the industry. Policy gaps remain, of course, but this move should foster the industry's growth.

More from CLP:
Unifying laws on private funds
Liberalising fund management
The rise of Chinese private equity


First aviation arbitration centre in Shanghai FTZ

The China Air Transport Association, International Air Transport Association and the Shanghai International Arbitration Centre (SHIAC) signed an agreement to establish the Shanghai International Aviation Court of Arbitration (SHIACA) and the Shanghai International Aviation Arbitration Experts Committee. SHIACA is the world's first arbitration centre specialising in aviation disputes.

Source:
China Law Insight

Chinese civil aviation transportation has ranked second in the world over the last decade. Shanghai has tried to become an international hub for shipping and aviation – the free trade zone has aided this development. The advantage of SHIACA is that while ad hoc arbitration is the common form of arbitration in the aviation industry, China still only allows institutional arbitration, which has led aviation enterprises to arbitrate abroad or take to local courts. SHIACA aims to enhance communication and connect domestic and international arbitration rules as well as to resolve enforcement problems. There are certain questions, such as to what extent international arbitration concepts will be implemented and whether SHIACA can solve disputes related to aviation accident compensation based on contracts. But practitioners believe these will be answered on a case by case basis.

More from CLP:
Enforcing arbitral awards: a guide
Five ways to get your order enforced
Picking the right arbitration institution in China
China question: How do I draft an arbitration clause?
Shanghai Municipality, Special Administrative Measures for Foreign Investment Access in the China (Shanghai) Pilot Free Trade Zone (Negative List) (Revised in 2014)
General Plan for the China (Shanghai) Pilot Free Trade Zone


Columbia Pacific Management brings expertise to China

Columbia Pacific Management, one of the largest healthcare providers in Asia, announced it will start construction next year on two multi-specialty hospitals in Wuxi and Changzhou through its new China hospital arm, Columbia China. It is pursuing other opportunities through acquisitions and greenfield projects. The group is also opening an outpatient clinic in Shanghai's Puxi district later this month that will target the growing middle class.

Source:
Business Wire

Columbia Pacific appears to have old ties with the China market. In 2011, its senior care affiliate Cascade Healthcare was the first foreign-owned company to receive approval from the government to build senior care facilities in China. It opened its third facility in Shanghai's Pudong district earlier this year. For a company that has expanded massively in jurisdictions with relatively loose regulations (26 hospitals in India and Southeast Asia), it seems confident in its investments in China. While it has gained local experience and opened several care facility branches in the last three years, how it fares with hospitals remains to be seen.

More from CLP:
Opinion: A warning for foreign hospitals
Circular on Launching a Pilot Project for the Establishment of Wholly Foreign-owned Hospitals
Not so free zone?