Insights on Doing Business in China

At Doing Business Globally in New York this afternoon, panelists in our Emerging Markets track session discussed regulatory changes, M&A outlook and common mistakes related to doing business in China.

Baker & McKenzie panelists included Howard Wu from Shanghai, Grace Tso from Hong Kong, and Skip Rankin from New York.

Some key takeaways:

  • The economy is slowing in China, but still growing. What China may consider a minimally acceptable rate of growth, is very acceptable in a more developed economy.
  • Overall, China has a much tougher compliance environment than in the past.
  • The government’s new fast-track merger control review speeds up processing time (from 4-6 months to 30 days) for mergers and acquisitions that don’t raise competition concerns.
  • There has been significant growth of privately-owned companies in China in the last 5-7 years. The three largest privately-held companies in China account for a huge portion of the country’s M&A deal activity.
  • Some common mistakes made by foreign companies doing business in China include: over-reliance on agreements, not enough awareness of employment activism, not enough personnel on the ground, insufficient due diligence and compliance pitfalls.