Our View on China
China possesses the second largest economy in the world, with the International Monetary Fund predicting it will be the world's largest economy in 2016. In the last 30 years, an estimated 600 million Chinese citizens have migrated from poverty into a vibrant and still fast-growing middle class of consumers. China has recently eclipsed the United States as the top destination for foreign direct investment. The country's outward investments are also rising fast, passing the USD$600 billion mark in recent years.
The People's Republic of China is a country of booming megacities, burgeoning with commerce – the traditional province of international law firms – and bustling with commercial transactions that cast an irresistible lure of law firm profits, prestige, and global influence. For international law firms, maximizing opportunity in China represents the classic riddle, inside a puzzle, inside an enigma. Indeed, the Chinese government works seamlessly with domestic industry to create barriers that buttress and entrench the state owned enterprise sector, and constrain foreign competitors. Such governmental restrictions also operate to inhibit and confound the practice of law by foreigners in China. China Trade Institute believes that, with the right strategic plan and appropriate team in place, China represents vast potential for the savvy, proactive international law firm. On the other hand, China can portend disaster for the unwary foreign law firm lacking a well-designed, firm-wide strategy for growth.
International law firms that wish to be globally preeminent, particularly on the transaction side, need to grow their cross-border capabilities between Asia and the U.S. The goal for international law firms should be to develop an integrated global platform to optimize cross-border transactional and dispute resolution capabilities between the world’s first and second largest economies.
China Trade Institute can provide the international law firm with a unique opportunity to optimize profits from China operations by delivering on three unique fronts:
1) CTI can assist with the creation of a firm-wide, cross disciplined, internal, professional service capability that will enable generous firm billable markups to industry standard. Under the supervision of central management, CTI can deliver sophisticated, billable China research, analysis and litigation support on a subcontracted, firm-wide, case-by-case basis. Management can configure this professional service capability to serve all offices with China related business;
2) CTI's staff of native Mandarin speaking analysts can render professional intelligence gathering services, at the direction of management, to afford unique and invaluable insight into the U.S./China interactive domain, from both a profit and a professional perspective. Such services can be provided to assist management in the administration and evaluation of firm-wide profitability, overall intra-office efficiency, and intra-office compliance with firm requirements regarding China operations;
3) CTI can facilitate the adoption of practice development initiatives that stem from China Trade Institute's proactive presence in the China arena and its rapport with PRC traditional institutions and governmental hierarchy.