On June 23, 2009, Robert Allan was a panelist on the Foreign Corrupt Practices Act and Globalization breakout sessions in the two day conference, which is the nation’s premier executive education program for directors and senior executives of publicly traded firms. Mr. Allan is highly regarded in the area of international business, especially as it relates to U.S.-China relations. Other panelists included the Hon. Stanley Sporkin, former U.S. District Court Judge and Alan Crain of Baker Hughes. Attending the seminar were CEOs of publicly held companies, scholars and board members. Additional topics analyzed were the credit crunch, corporate governance and risk management.

For more information on the Directors’ College program, please click here.

06/18/2009  Source: www.chinaview.cn

Vice Premier Li Keqiang said Thursday that energy-saving, environmentally-friendly industries should be made a new growth engine for China’s economy.

At a meeting in Luoyang, in central Henan Province, Li urged companies to step up innovation to cut energy use and emissions.

Green development was a global trend in industrial restructuring, he said, and also the long-term strategy for China, which is hampered by inadequate natural resources.

Energy saving and emission reduction is also part of the government’s measures of boosting domestic consumption and maintaining growth, he said.

Green development should be moved forward in such key areas as the industrial, transportation and construction sectors, he said.

He asked enterprises to step up research on new energy products, environmental protection facilities, and recycling economy.

Innovation should also be made in environmental protection policies to facilitate green industrial restructuring, he said.

Li also visited residents community in the Luoyang city and called on people to enhance green awareness.

China is marking an energy-saving awareness week from June 14-21.

06/18/2009   Source: People’s Daily

China on Thursday rejected accusations that it practicing protectionism in its 4-trillion-yuan ($585 billion) stimulus package.

Foreign Ministry spokesman Qin Gang, at a regular press conference, denied accusations that an official document ordered government bodies to discriminate against foreign companies and ran counter to the commitment to oppose trade protectionism.

The National Development and Reform Commission issued the notice on June 1 to improve the supervision of tenders related to the stimulus package, said Qin.

“The purpose of issuing the notice is to ensure a fair and competitive market,” Qin said.

He said the notice complied with China’s government procurement law of 2002 and international common practice, and foreign enterprises and products would face no discrimination.

He said the government had all along taken an open strategy and pursued mutual benefit in cooperation with other countries.

6/12/09  Source:  Thestandard.com

Investors turned cautious about China plays yesterday, as fears mounted that a renewal of initial public offerings in the mainland would soak up the liquidity in the market.

Hong Kong stocks bounced up and down in weak trading, ending slightly up as declines in local property plays were countered by gains in some financial stocks.

“The market still lacks a clear direction,” said Redford Securities head of research Kenny Tang Sing-hing. “The Hang Seng Index still needs more consolidation.”

The Hong Kong market spent much of the day in negative territory but racked up gains in the last hour of trading. The Hang Seng Index closed at 18,791.03 points, up 5.37 points or 0.03 percent.

The Shanghai Composite Index fell 18.92 points, or 0.7 percent, to close at 2,797.320 after the China Securities Regulatory Commission issued new guidelines on initial public offerings.

The new rules indicated the approval process would be revived after an unofficial freeze on flotations since September.

“In the short term, it will be an excuse for a correction,” said Sun Hung Kai Financial strategist Castor Pang Wai-sun.

In Hong Kong, shares worth HK$78.4 billion changed hands on the main board, down from HK$83.5 billion on Wednesday.

Hang Lung Properties (0101) plunged 4.8 percent to close at HK$25.55 on fears US interest rates will soon rise.

Henderson Land (0012) shed 2.7 percent to HK$45.55, while Cheung Kong (Holdings) (0001) fell 2.7 percent to HK$91.45.

“The turnover has not improved a lot, which indicates the momentum is not strong enough to break above the 19,000 level yet,” said Tang of Redford Securities.

The Hang Seng China Enterprises Index of H shares rose 47.29 points, or 0.4 percent, to close at 11,080.84.

China Construction Bank (0939), the day’s most active stock, rose 2.4 percent to HK$5.46 as shares worth HK$6.6 billion changed hands. Industrial and Commercial Bank of China (1398) rose 1.4 percent to HK$5.10.

6/04/09  Source: Business Week

Beijing – As a journalist in China for nearly 15 years, I’ve had to play a second role as something of a guide to American culture. In the small talk that inevitably follows interviews with government or industry bigwigs, I’m sometimes asked: “How is this done in the States?” That’s because China has often sought to emulate the American economic system. A planned stock exchange was pitched as a “Chinese Nasdaq.” A central bank reform was modeled on the U.S. Federal Reserve system. And officials and executives alike boast that their staffers have spent time in the U.S., a badge of honor in China.

As Treasury Secretary Timothy Geithner motorcaded his way through Beijing this week, though, it became clear that mainlanders have far less respect for the American Way these days. While there’s scant evidence that Chinese youth are avoiding McDonald’s (MCD), KFC (YUM), or the myriad other beacons of U.S. culture that dot the landscape, American management has fallen out of favor. “I used to think the U.S. was a very good country,” says Li Mo, a 26-year-old wearing a red LeBron James T-shirt and sipping an iced mocha in a Beijing Starbucks (SBUX). “But after the financial crisis, I began to think China is the best place in the world.”

That’s not to say people here are happy about Beijing’s management of the economy. In fact, plenty of Chinese feel their country has too closely followed the lead of Washington-or Wall Street. China’s sovereign wealth fund, the China Investment Corp., has been roundly criticized for losses (on paper, at least) of $4 billion on investments in New York financial houses Blackstone Group (BX) and Morgan Stanley (MS). And many fear Beijing may ultimately take a far bigger bath on the $1.4 trillion-plus in U.S. securities it holds.

Much of the discontent is showing up on China’s freewheeling Internet forums. On these Web sites, countless postings attack U.S. banks and politicians for reckless behavior. The U.S. economy “is like a dump truck just starting to tip,” reads one comment on the Web site of broadcaster CCTV. On a hyper-patriotic online forum called Revival, another post declares that “anyone who sends money to the U.S. is betraying the Chinese people!”

STOP TRYING TO PLEASE
Wang Xiaodong may be one of the most vociferous proponents of this view. I first met him more than a decade ago, when he was running Strategy & Management, a Chinese journal that advocated a turn away from Western values. He recently co-authored China Is Not Happy, a book that has sold more than half a million legal copies, with an untold number of pirated versions in circulation. In it, Wang criticizes the U.S., saying it has damaged itself by focusing too much on its financial sector while sending manufacturing offshore. China, he says, needs to adopt a more assertive economic, diplomatic, and military stance. “China’s policies are always based on trying to please the West. We don’t think this is necessary,” Wang tells me as he sips a Coke, a beverage he allows is “pretty good.”

The anger has found its way into official rhetoric. Premier Wen Jiabao on Mar. 13 urged Washington to “maintain its good credit, to honor its promises, and to guarantee the safety of China’s assets.” During his visit to Beijing, Geithner heard plenty of concern about such matters, with students at Peking University questioning him on the financial crisis and how Washington might put things right. And those worries about China’s U.S. investment holdings? They’re “very safe,” he told the students. “We have the deepest, most liquid financial markets in the world.” Good luck convincing the Chinese of that.

6/15/09  Source: Wsj.com

BEIJING (AFP) – Chinese state media defended Friday a new directive that PCs sold in the country must come with Internet filtering software, as concern mounted in China that it violates personal privacy.

Computer makers have been told that all personal computers sold from July 1 must be shipped with anti-pornography software, a move that trade and rights groups have said is a bid by Beijing to further tighten Internet controls.

But the state-run Liberation Daily newspaper said Friday the move was consistent with laws aimed at shielding young people from harmful influences.

“The state encourages research into Internet products that help minors surf the web in a healthy manner,” it said.

The report marked the latest state media defence of the Green Dam Youth Escort software that has been blasted by rights groups as an attempt by China to filter sensitive websites since the rule was revealed early this week.

China has the world’s largest online population at nearly 300 million and authorities have a history of blocking sites they deem politically unacceptable or offensive, a system that is dubbed the “Great firewall of China”.

But a study by researchers at the University of Michigan said the software contained “serious security vulnerabilities.”

It said these could “allow remote parties” to “take control of the computer.”

“We found these problems with less than 12 hours of testing, and we believe they may be only the tip of the iceberg,” said the report posted on the website of the university’s computer science school.

It added that the software’s text filter blocked words that included obscenities and politically sensitive phrases such as references to the banned spiritual movement Falun Gong.

Li Fangping, a Beijing-based rights lawyer, told AFP he had submitted a request to the Ministry of Industry and Information Technology to hold a hearing to explain the exact nature of the software before July 1.

“As netizens, after installing the software, will information be blocked, will our safety and our privacy be protected? These three issues they should explain and answer,” he told AFP.

“There needs to be a consultation with experts, lawyers, netizens, and technical staff,” he said.

The new rule has come in for an unusual amount of criticism in previous state newspaper articles.

The China Youth Daily questioned the software in an article published Wednesday.

“Does such a notice have a legal foundation? Which law grants the ministry this type of right?” it said.

Friday’s Liberation Daily report quoted Hao Xianghong, head of the China Youth Internet Association, as saying that 80 percent of primary and middle schools in the country had already installed the software.

“That means more than 20,000 schools, and according to feedback, they are generally satisfied,” he was quoted as saying.

A report by the official Xinhua news agency also said Friday that around four million computers in primary and secondary schools in Shanghai would be equipped with the software by the end of the month.

5/05/09  Source: Legalbusinessonline.com

Few transactions have been as widely debated and talked about in the legal sector as the failed acquisition of China Huiyuan Juice Group by the Coca-Cola Company. If it had been approved, the proposed US$2.4bn acquisition would have been the largest takeover of a domestic company by a foreign entity. However, it in fact became the first transaction blocked under the new Anti-Monopoly Law (AML).

“This is the first time MOFCOM has denied antitrust approval of an acquisition, so naturally it has raised a lot of attention from the public and business community,” says Zhan Hao, managing partner of Grandall’s Beijing office. “There are grave concerns about this decision, mainly because the reasonings in it were very general, and the transaction involved a well-known multinational company and a famous national brand.”

Despite these concerns, the majority of AML and competition lawyers believe the decision marks the coming of age of the AML practice in China.

Defending the decision
Regardless of the final outcome, lawyers have noted the beneficial results of the procedure and the process of MOFCOM’s review.

“In reviewing this transaction, MOFCOM has followed the rules they set up, in terms of the procedure. The process is more transparent and involved more communication. To me, that’s one good sign,” says David Blumental, a partner with Vinson & Elkins in Shanghai. “Antitrust is a very complicated area of the law, involving detailed economic analysis, so a high level of communication is required in order to ensure that the regulators can review a transaction properly.”

Some media reports said the decision indicated the country was closing the door to foreign investment, but DLA Piper’s Asia head of competition practice, David Cox, says it is difficult to be absolutely sure because the decision was very brief and certain things are still not clear.

“Many of the comments made in the press are either being misconceived or unfair. To be able to make fair comments, one has to be very reserved,” Cox says, pointing out that the rulings adopted by MOFCOM on Coca-Cola’s acquisition of Huiyuan look very similar to a decision made previously by Australia’s competition authority. In 2003, the Australian Competition and Consumer Commission (ACCC) opposed the acquisition of Berri Limited by Coca-Cola Amatil, the Australian Coca-Cola bottler and partly-owned affiliate of The Coca-Cola Company.

In both cases, a major concern of the regulators was that Coca-Cola would have gained the ability to leverage a dominant position in the carbonated soft drinks market into the juice market.

“Whether the ruling is valid or not is impossible to see at the moment, due to the short nature of the decision,” Cox says. “However, this type of merger… is the type of situation that has raised difficult competition issues in other jurisdictions, such as in Australia and the EU. This will always be a difficult case and the reasonings adopted by MOFCOM are classic reasonings of competition authorities with similar cases around the world.
“It clearly shows that AML and competition law in China has come of age. MOFCOM is acting very much in a way the ACCC would act in Australia, the European Commission in the EU and the FTC in the US. They all have extensive powers and they are using them,” he adds.

In addition, the decision indicates that solutions or remedies were discussed between Coca-Cola and MOFCOM. Although the remedies proposed by Coca-Cola were considered by MOFCOM as insufficient, some industry observers have suggested it was pragmatic to try to find solutions – an encouraging sign for foreign investors.

Not a bad thing
While lawyers are confident that the Coca-Cola/Huiyuan ruling will not directly affect future M&A, in terms of foreign investors’ interest in making acquisitions in China, the unpredictability of the AML enforcement may make it difficult for legal advisors to provide precise advice and consel to clients.

“As MOFCOM only needs to publish decisions of rejection and conditioned approval, we don’t know much about the approved deals. So we can’t study them and understand the implementation of the new law better, in order to help clients accordingly,” says Peter Wang, a partner at Jones Day in Shanghai.

Nevertheless, many said the lessons that can be drawn from both the Coca-Cola/Huiyuan and InBev/Anheuser-Busch decisions would help to stimulate more legal work.

“Foreign investors won’t give up their plans to acquire companies in China due to this ruling or [the] increasingly sophisticated legal environment. But they will think twice before starting a deal, particularly for multinationals, who have large market share in certain markets or have important brand names that are well-known in China and worldwide,” Wang says.

“Potential acquirors will seriously consider if it is worth trying to do M&A deals in China in related product areas. From now on, multinationals and other investors will have to look more seriously into the AML and competition issues before they start a deal, and need to be prepared for different possibilities – such as no antitrust approval or delays in approvin – in the planning a transaction.”

With the emergence of AML and competition legal practices in China, international firms have geared up to make a mark in the new market. They are increasing their capabilities by relocating experienced lawyers from UK or US offices and promoting local talent to partner.

“Antitrust is a brand new practice area for all PRC firms. It is a complicated area and sets a high threshold for lawyers to enter, but it offers local firms great prospects for growth,” Zhan says. Although international firms have natural advantages in this area at the moment, he believes PRC firms will play an increasingly important role in advising on merger control matters in China. Zhan also noted that PRC firms can provide a wider range of antitrust and competition legal services in China than their international counterparts.

“Advising on matters related to merger control will be only one part of the antitrust practices at PRC firms. We are also developing expertise and resources in private antitrust litigation, dominance and abusive conduct inquiries and IP-related unfair competition cases,” Zhan says.