In the news: The NDRC relaxes outbound rules, commodities futures trading opens up and more PRC law firm mergers take place

NDRC's outbound requirements relaxed

The Economic Observer reported that requirements for Chinese companies to get approval for outbound investment have been relaxed. The NDRC has approved the bill and has handed it to the lower levels, but has not made it available to the public yet. The bill states that companies now only need to file – with approval no longer needed – with the NDRC if the projects aren't related to sensitive countries and industries. The April outbound rules required companies to get approval for all outbound investment projects worth US$1 billion or more or involving sensitive countries, regions or sectors. The new law removes the price threshold and only maintains the sensitive criteria for NDRC approval. It also states any investments which are sensitive and over US$2 billion require NDRC filing and State Council approval. With a growing wave of outbound investments by PRC companies – and an increasing NDRC workload with limited resources – simplifying the notorious Chinese regulatory approval process is a welcome development and may be one answer to the domestic economic slowdown.

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Opening the gates for outbound investment
CLP Outbound Investment Guide 2014


China allows foreign investors to trade in commodities futures

The CSRC has published draft rules to allow foreign investors to trade in some of the country's commodities futures as China seeks to increase influence on global commodity pricing. The Shanghai Futures Exchange's crude oil futures will be the first contract qualified foreign investors will be able to trade, through approved brokerages or direct trading licences. China is the top consumer of raw materials in the world and has some of the most liquid commodities futures markets. Although overseas trading firms have been eager to tap the country's commodity exchanges, state restrictions have prevented foreign participation. The draft is open for comments until January 31. The lack of global institutional investors has led to China's futures markets being largely dominated by retail investors and prone to speculative trading. This development is one step forward in maturing the country's capital markets and opening up on a global scale. But is this really an open invitation

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Factors for capital markets growth
Special Administrative Measures for Foreign Investment Access in the China (Shanghai) Pilot Free Trade Zone (Negative List) (Revised in 2014)
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East Associates and Concord & Partners merge

Mid-sized firms East Associates and Concord & Partners have merged, the latest in a series of PRC law firms coming together as the country's legal market consolidates. East Associates, founded in 1993, is known for its Japan, antitrust and criminal defence practices while Concord & Partners, founded in 1995, focuses on FDI, M&A, capital markets and commercial dispute resolution. The merger creates a 210-lawyer firm. East Associates merged with Gaopeng & Partners in 2004 but split after three years. 2014 saw Boss & Young merging with JoinWay Law Firm and Zhong Lun acquiring Kaiwen Law Firm. Which firms will be next to adopt this strategy to give them the resources to compete with the top firms and how well will they fare as quality of service and fees become increasingly competitive Maybe the next development will be a tie up between a Chinese law firm and a foreign peer.

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Law firm competition heats up in China