Challenges in cross-border investment and financing

    From left: Emilia Shi, Yao Weiqi, Leslie Zhang, Gao Wei and Wu Siying

    Chinese enterprises going global is a growing trend, and at CBLJ Forum 2019, Dentons China moderated a discussion on “Legal challenges for companies in cross-border investment and financing”.

    Emilia Shi, a senior partner at Dentons, pointed out that Chinese companies should make an estimate about how long it would take to obtain approval from the central government when engaging in cross-border mergers. She also added that the US and Europe had strengthened their examinations of foreign investment.

    Wu Siying, senior consultant at Dentons, was of the opinion that cross-border mergers by Chinese enterprises would continue to boom. He said the role of lawyers should be providing more detailed and up-to-date information to clients, and helping them to make more accurate judgments. And he said lawyers should also assist clients in navigating barriers and difficulties after they had made their decisions.

    Zheng Kai, managing director, Corporate Finance and Capital Markets at CLSA, noted that the majority of enterprises that went global used to be state-owned enterprises (SOEs), but now private enterprises and SOEs shared this equally. He also said that Chinese enterprises tended to conduct overseas project financing through a financing group made up of Chinese-funded investment banks and local financial institutions to ensure the long-term stability of making investments locally.

    Yao Weiqi, a senior partner at Dentons, said the Outline Development Plan for the Guangdong-Hong Kong-Macau Greater Bay Area covered many breakthrough measures relating to the cross-border operation of financial institutions, and the cross-sales and agency sales of financial products. She believed that cross-border transactions or investments of financial products would facilitate companies’ overseas investments.

    Leslie Zhang, the deputy general manager and general counsel of the Legal Department of United Energy Group, said that risks in transactions were closely related to supervision at home and abroad, the exchange and outflow of renminbi, social movements, etc. He pointed out that the certainty and flexibility of transactions should always be considered when conducting overseas mergers, and that the key to making a deal was to find the mutual interests of relevant parties to the transaction.

    Gao Wei, the managing director at Sinotrans Air Transportation Development, said that logistics companies like his take a global view and started to invest in this area with the idea of going global. He added that going global required an understanding of the international rules. “We hope to make our own innovations under existing rules, rather than creating a brand new system,” he said.

    The media coverage on the roundtable conference is organized based on shorthand transcripts. Any remarks by the guest speakers and scholars represent their own opinions, and not the opinions of the organizations to which they belong. Read the full report of the CBLJ Forum 2019 here.