China is seeking foreign help to pursue overseas investors who flee the country without properly liquidating their assets.
China's ministries of commerce, foreign affairs, justice and public security jointly issued on Friday a guideline for cross-border investigation and litigation of fugitive foreign investors.
The country would follow both international rules and domestic regulations to address such cases and seek assistance from foreign countries, the ministries said.
China would also request extradition or case transfer when a "huge amount of money" was involved, it said.
There are increasing cases in China of foreign investors who do not go through the formalities of declaring bankruptcy, but instead slip away, leaving behind equipment, unpaid wages and debts. Most of those fleeing investors were in small and labor-intensive companies.
Most foreign-funded companies in China are supported by domestic companies, and any capital withdrawal by the foreign-funded companies would affect the domestic ones, industry experts said.
According to previous media reports, 87 companies funded by investors from the Republic of Korea (ROK), withdrew from Shandong Province without proper liquidation of assets last year. The figure was 21 in 2003.
In January, more than 10 ROK company officials suddenly abandoned their Yantai Shigang Fiber Co in Shandong and fled because of financial difficulties. They left without paying the wages of more than 3,000 employees and large debts.
Source: China Daily, December 20, 2008
According to a notice published on its Chinese website, the China Development Bank Corporation (DBC) was set up on Dec 16 to become the first Chinese policy bank to change into a commercial bank, marking an important step forward for Chinese policy banks.
The new joint-stock entity DBC in whole inherited assets, debts, business, institutions and employees amounting to a registered capital of RMB 300 billion. China's Ministry of Finance became the Majority shareholder with an investment of RMB 153.908 billion while Central Huijin, an investment arm of the government, invested the rest at RMB 146.092 billion. All of the institutions, brands, domain names on the internet, and telephone numbers of consulting service will not change from those of the former China Develop Bank.
The reform of Chinese policy banks began in the beginning of 2006. This was shortly after a report in the November 2005 edition of Report Finance Stability revealed changing ideas about China¡¯s banking sector. A statement from China¡¯s central bank pointed out that the business environment of policy banks had changed and accordingly, the function of policy banks must be reappraised.
In 1992, the former Chinese leader Deng Xiaoping raised the point that China should develop its commercial banks into real commercial bank. This led to the Big-four state-owned banks to separate their policy business, which led to the establishment of China¡¯s three policy banks.
The former China Development Bank was engaged in lending to support the development of Chinese basic infrastructure and large industrial projects. While China Development Bank has made a great contribution to China¡¯s development, the economic environment has changed. Many industries that once needed financial support from policy banks have become competing industries.
Another reason for the reform is to distance themselves from a industry known for poor management, allowing DBC to become more competitive.
The establishment of DBC is a significant advance in policy bank reform as well as an important part of China¡¯s financial reform.
By Weiwei Ye...
At first, the name Lehman conjures up thoughts of financial ruin and business collapse but LEHMAN, LEE & XU, of no relation to the now-bankrupt Lehman Brothers, is at the top of its game and looking to expand its business while other international firms are shrinking. With its head office in Beijing, China, LEHMAN, LEE & XU has seen the rise and fall of international law firms attempting to penetrate the Chinese market. In the past few years many large firms from all over the world have opened offices in Beijing and throughout the rest of China and have sent many of their best legal talent to navigate China¡¯s sometimes treacherous legal waters. Recently, some of these firms such as DLA Piper have been forced to downsize their Chinese offices, sending many of their expatriate employees to return to their home countries. Some firms have even required payment from long-time partners in order to give them some measure of job insurance for the future.
However, because of its long-standing presence and experience working in China and its prominent, loyal client base, LEHMAN, LEE & XU is experiencing impressive growth, even during this time of down-sizing and demotions. With their newly established "financial crisis task force", their legal services are more in demand than ever and they have seen their clientele grow and prosper. As a result, LEHMAN, LEE & XU is currently looking to hire 100 lawyers to meet the increasing demand for the firm¡¯s unparalleled legal expertise. While businesses in every industry are being forced to trim down before the winter, Lehman, Lee & Xu is building muscle in order to keep its clients safe, warm and protected in the midst of this financial storm.
Source: LEHMAN, LEE & XU Press Room
BEIJING -- Chinese lawmakers will debate eight bills and several cabinet reports, including one on China's response to the international financial crisis, during a six-day, bi-monthly session which starts Monday.
The Standing Committee of the 11th National People's Congress, or the top legislature, is expected to review draft amendments to the earthquake precautions and disaster relief law, the patent law, the criminal law and the insurance law at its sixth meeting. It will also consider social insurance and tort liability law drafts.
The draft law on arbitration of rural land contract conflicts and draft amendment to the law on statistics will be tabled at the session for the first reading.
Lawmakers will also discuss four cabinet reports dealing with: the implementation of the 11th Five-Year Plan; measures to cope with the international financial crisis and maintain stable, healthy economic growth; measures to stabilize consumer prices and efforts to control water pollution.
Two international pacts are due to be ratified during the session: the pact on joint military exercises held by Shanghai Cooperation Organization members and the pact on criminal judicial assistance between China and the United Arab Emirates.
Source: China Daily 2008-12-22...
China¡¯s banking regulatory organization, the China Banking Regulatory Commission, issued Guidelines on the Supervision of Commercial Bank Loans for Mergers and Acquisitions, allowing commercial banks to provide loans for mergers and acquisitions to support enterprises as of Dec.9, 2008.
The guidelines are aimed at encouraging bank lending for M&A and helping local companies expand fund-raising channels. According to the guidelines, commercial banks, including foreign banks, may provide loans for companies to support M&A.
Risk control is still emphasized heavily in the guidelines. For example, the guidelines require that commercial banks involved in M&A lending that concerns cross-border transactions must also evaluate country risk, foreign-exchange risk and transit-of-capital risk.
The guidelines also say that M&A loans cannot exceed half of a bank¡¯s core net capital during the life of the loans, and loans to any single borrower cannot exceed 5% of the bank¡¯s core net capital during the life of the loans.
Allowing bank loans for M&A will benefit listed companies and private equity enterprises, which is also a strong measure in combating the negative influence of the financial crisis.
By Weiwei Ye
The former vice-president of the Supreme People's Court, Huang Songyou , who is under investigation for corruption, has surprisingly won an award recognising his achievements in legal studies, mainland media reported yesterday.
Mr Huang won third prize in the official Qian Duansheng Law Achievement Award on Saturday. It is considered the most prestigious of its kind on the mainland. He was given 5,000 yuan (HK$5,640) in prize money for his article "The power of Judicial Interpretation", published in 2005, local media reported.
The awards ceremony was held at the Great Hall of the People.
Mr Huang did not attend and his commendation was not publicly announced. But a worker at the ceremony confirmed that he had been given the award.
Mr Huang, who is under investigation for allegations of corruption, was among four senior officials sacked on October 28.
Supreme Court vice-president Shen Deyong said Mr Huang's case was still under investigation and had not been charged.
Mr Huang was officially put under shuanggui - a form of party investigation - by investigators from the Central Commission for Discipline Inspection on October 15.
"He is the highest ranking court official in China to have been put under shuanggui since 1949," a jurist based in Beijing said.
Mr Huang was allegedly involved in a corruption scandal in Guangdong, which led to the detention of senior provincial official Yang Xiancai in July.
As the vice-president, Mr Huang supervised the civil cases division and enforcement of Supreme Court decisions.
Mr Huang is recognised for promoting the idea of judicial interpretation of constitutional law. He was promoted to vice-president of the Supreme People's Court in 2002.
Since Mr Huang's dismissal, party leaders have admitted that it faces a serious problem with corruption and have vowed tough punishment for law-breakers.
Party leaders also approved in principle on November 28 a resolution to push ahead with judicial reform, although they gave few details of the reform plan or any timetable.
Source: South China Morning Post http://www.scmp.com/portal/site/SCMP/
Kelly Zong, lawyer of Lehman, Lee & Xu, gave birth to a lovely baby a few days ago. We are all very excited at the news that a lawyer of the next generation was born. Her baby, although only a few days old, seems to have inherited some of the basic qualities of a lawyer. According to Kelly, although the baby has not yet learned written laws, she does seem to have a knack for natural law. She seems to know that all men are created equal. She seems to know that one of the most important human rights is the ¡°right to an adequate standard of living¡±, and therefore she would cry out without hesitation and fight for milk whenever she is hungry. We all hope that the lovely baby will grow up into a qualified lawyer of the next generation.
This year, I was fortunate enough to gain some practical work experience with the law firm of Lehman, Lee & Xu. Not only was this experience useful for my future legal career but it was enjoyable and gave me the opportunity to meet good people and learn from their expertise. Throughout my time, I was able to research various legal topics, learn more about the Chinese legal arena, meet with the Mongolian ambassador and publish my first legal article. Without the help of my colleagues and peers at Lehman, Lee & Xu I would not have gained so much from the experience. I look forward to using the contacts and associations I have made through my position at the firm to help me in the future!
China¡¯s annual Central Economic Work Conference, to be held from Monday to Wednesday in Beijing, will set the tone for next year's economic policy. The three-day event is expected to shed more light on how the government will use fiscal and monetary measures to bolster employment and domestic demand, while reducing excessive dependence on exports.
Over the past months, like many other countries or regions throughout the world, China was heavily affected by the world financial storm. Consequently, a number of factories in the costal export bases have closed down, leading to the layoffs of hundreds of thousands of migrant workers. University graduates are also finding it hard to get jobs.
The bleak situation has led the government to unveil a host of measures such as a $586-billion stimulus package and hefty cuts in interest rates to jack up domestic demand.
It is said that the meeting will detail measures for achieving at least 8 percent growth in 2009, the minimum required to keep the unemployment situation under control.
We do not know yet what effect this meeting will bring about to China¡¯s economy and China¡¯s employment issues. Meantime, all we can do is to keep our fingers crossed and hope for the best for China as well as to the whole world.