Guo Lian Law Firm

The global retailing giant Walmart announced in February that it would further acquire 33.6% interest in Yihaodian, a leading B2C e-commerce company in China. Before the investment, Walmart already held 17.7% interest in Yihaodian. The new deal is subject to government regulatory approvals, including antitrust approval from the Chinese anti-monopoly regulator, the Ministry of Commerce (“MOFCOM”). On 13 August 2012, Walmart announced that it has received conditional approval from MOFCOM.

On 2 March 2012, MOFCOM published its conditional approval to the $4.5 billion acquisition of Viviti Technologies Ltd (a company directly holding Hitachi Global Storage Technologies Netherlands B.V. ,which holds Hitachi Global Storage Technologies Singapore Pte. Ltd.) (“Viviti”) by Western Digital Corporation (“Western Digital”).

The new version of Industrial Catalogue for Guiding Foreign Investment (“Catalogue”) was formally released on 24 December 2011. It will come into effect on 30 January 2012 and supersede the Catalogue published in 2007. The 2011 Catalogue brings significant adjustments to China's industrial policy towards foreign investment.

The regulatory regime on private equity fund is developing at a fast pace, despite there is still no unified national-level law or regulation governing the business. After establishing its authority as a key regulator of China’s venture capital funds, China’s National Development and Reform Commission (“NDRC”) takes the leadership in developing the regulatory regime and is determined to expand its regulatory power into the area.

China launched formally a comprehensive business concentration control regime on 1 August 2008 when its Anti Monopoly Law (“AML”) entered into effect.

In an action brought before the Court of First Instance of High Court of Hong Kong Special Administrative Region (“Hong Kong”) for enforcing a CIETAC arbitral award earlier this year, Justice John Saunders rejected a claim that three official letters issued by the Secretariat of CIETAC constituted a supplementary/additional arbitral award.

The Anti-Monopoly Law (“AML”) opens a new landscape for merger and acquisition practice in China. Regardless where a merger takes place, if the transaction satisfies the prescribed conditions, it must be filed with China's Ministry of Commerce (“MOFCOM”), the agency charged with enforcing the merger control laws in China, for business concentration review.

On 6 May 2011, China’s National Development and Reform Commission (“NDRC”) published a statement commenting on the punishment on Unilever (China) Co. Ltd. (“Unilever”) for its unfair price competition acts, endorsing publicly the law enforcement action in Shanghai.

On 4 May 2011, China’s Ministry of Commerce (“MOFCOM”) published draft Administrative Measures Concerning Capital Contribution with Equity in relation to Foreign-invested Enterprises for public comments (“Measures”).

On 31 January 2011, the General Office of the National Development and Reform Commission (“NDRC”) issued the Circular on Further Regulating the Development, and the Administration on Filings, of Equity Investment Enterprises in Pilot Regions (“Circular”).

The National Development and Reform Commission (“NDRC”) is the leading regulator of China’s venture capital investment business. Its regulating power was granted under the Provisional Measures on Administration of Venture Capital Investment Enterprises (“Measures”) promulgated in 2005, which authorized the NDRC to regulate the business relating to venture capital investment at the central level.

Shanghai Municipal Finance Office officially released the Details on Implementing the Pilot Program of Foreign-invested Equity Investment Enterprises [Hu Jin Rong Ban Tong (2011) 38] on 12 January 2011 (“Pilot Program”), which will take effect from 1 February 2011.

In China, raising funds from public must be conducted strictly in accordance with laws to avoid criminal liabilities. China’s Criminal Law (1997) criminalize some public fundraising conducts and imposes severe criminal punishments on violators.

The State Council released the revised Administrative Regulations for Registration of Foreign Enterprise Representative Offices on 19 November (“Regulations) replacing previous rules issued in 1983. The Regulations stipulate several new requirements that increase Rep Offices' administrative burdens.

Ministry of Housing and Urban-Rural Development of PRC issued the Measures on Administration of Lease of the Properties Sold as Commodity (“Measures”) on 1 December 2010. The Measures will take effect from 1 February 2011, which will then replace the Measures on Administration of Urban Property Lease promulgated in 1995. The Measures apply to the lease of commodity properties constructed on State-owned land in the planned urban area.

In March 2010, Shanghai Government proposed a trial program ("Trial Program"), known as qualified foreign limited partner program, to the central government for its approval. The Trial Program will relax current restrictions on conversion of foreign-currency capital to enable qualified foreign investors to directly invest in a RMB private equity fund. In early October 2010, it was reported that the Trial Program has been approved “in principle” by the relevant departments of the State Council.

On 22 March 2010, China’s Ministry of Commerce, Ministry of Finance, General Administration of Customs and the State Administration of Taxation jointly issued Circular on Measures of Qualification Review for Tax Refund and Exemption Granted to Foreign-invested Research and Development Centers concerning Equipment Purchases to clarify the procedures that foreign-invested R&D Centers shall follow when claiming refund or exemption of import taxes imposed on purchase of equipment.

China’s State Council issued Several Opinions on Further Improving the Work of Utilizing Foreign Investment, (Guofa [2010] No. 9) (the “Opinions”) on 6 April 2010. The Opinions set out its guideline on the future development of China’s foreign investment policies.

China State Administration of Taxation issued on 20 February 2010 the Provisional Measures for Tax Collection and Administration for Foreign-Enterprise Representative Office (“Provisional Measures”). The Provisional Measures bring significant changes to the existing taxation rules and should have significant implications on the tax liabilities of representative offices.

China's State Administration for Industry and Commerce released rules of registration of the foreign-invested partnership in January 2010. The rules were promulgated to implement China's State Council's rules on the same, which were released in December 2009.

China announced the issuance of the Administrative Measures for Foreign Enterprises and Individuals to Establish Partnership Enterprises in China by the State Council on 2 December 2009. The legislation officially opens the route for foreign investor to invest directly in a partnership enterprise in China. From its effective date, 1 March 2009, foreign investors will be able to establish partnership enterprises either by themselves or with Chinese partners.

China’s Ministry of Commerce (the “MOFCOM”) has released the “Rules of Filing of Concentration of Business Operators” and “Rules of Assessment of Concentration of Business Operators” on 24 November 2009. The Orders are significant progress of China's merger control legislation. They clarify issues relating to filing of a concentration of business operators and assessment of such filings by the MOFCOM.

China’s food safety legal system is currently undergoing a fundamental reform. On 30 July 2009, the SAIC released Measures for Supervising and Administering Safety of Food in the Distribution Stage and Administrative Measures for Food Distribution Permit to clarify the SAIC's roles in supervising and administering food safety in the distribution stage. The Orders impose significant new compliance obligations on the food and beverage distribution business.