The Rise of China as an Economy
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There has been much in the press recently about the rise of China as an economy. What does this mean for commercial law firms and their clients?
"It would be hard to exaggerate the importance of the rise of China - this is true whether we consider it from the economic, political or even cultural perspective. The process of this country's emergence onto the world stage has really only just begun, yet we can already appreciate the insight of Napoleon, who said presciently some two centuries ago, that "quand la Chine s'éveillera, le monde tremblera" (when China awakes, the world will tremble).
From an insignificant position just a couple of decades ago, China now attracts huge inflows of foreign investment, occupies a very large and fast-growing trade position and is a huge importer (and producer) of high technology. At the same time, it continues to be the site of rampant intellectual property rights violations. Since December 2001 the country has been a member of the World Trade Organization (WTO), and occupies one of only five permanent seats (with corresponding veto power) at the UN Security Council. The China International Economic Trade Arbitration Commission is now one of the busiest arbitration commissions in the world. China matters.
The implications for British business are evident. Two-way trade has grown significantly, and British investment into China is the greatest of any European country. Chinese investment overseas has also increased greatly. We are witnessing the effective relocation of significant elements of British manufacturing capacity to China, with the establishment of hundreds of joint ventures and wholly owned subsidiaries in China. Moreover, apart from manufacturing, the new sectoral liberalisation measures concomitant with China's membership of the WTO mean that investment into China from the UK financial services sector is now growing. British businesses - large, medium and even many small ones - find themselves increasingly buying from, selling to or investing in China. Virtually no significant UK business - or any which aspire to significance - can remain ignorant of the China market.
Their lawyers, therefore, have to know how to advise them. This raises great challenges for the UK legal profession. To help our clients with China transactions, British lawyers have to cope with a sometimes radically different legal system, which operates in a notoriously difficult language, and against a dauntingly unfamiliar cultural and political background. Commercial firms will have to find lawyers with appropriate skills. While that may pose recruitment problems for firms, it should help place a premium on specialist skills-sets."
Andrew Halper is head of Eversheds China Business Group. A fluent Mandarin Chinese speaker, he worked in Beijing from 1991 to 1998, first as a diplomat and then as a lawyer.
On 2nd April Eversheds is launching The Big Deal. This is a unique opportunity for first year students (law and non-law) at UK universities to experience first hand the "thrills and spills" of life in an international commercial law firm. This is an invaluable chance to gain genuine commercial awareness, working together with Eversheds' lawyers. To find out more about The Big Deal visit Eversheds' graduate recruitment site at www.eversheds.com/graduate.