Chinese law firms have been given the green light to invest in the UK while City lawyers stand to benefit from Chinese businesses expanding overseas, under new rules laid out by the Chinese government.

Long-awaited guidance - issued by the Ministry of Commerce and the Ministry of Foreign Affairs as part of their 'Going Global' policy - has set out the industries and countries in which the Chinese government would like to see outward investment.


The list of approved industries varies depending on the country in question. Apart from legal services, approved sectors for investment in the UK include financial services, pharmaceuticals, research and development, distribution and transport. However, companies looking to expand overseas will still need to obtain regulatory approvals for projects.



Deschandol: dramatic move
Jean-Marc Deschandol, international managing partner of City firm Norton Rose's Beijing office, said: 'This is a dramatic move - in the past, it was almost impossible for state-owned companies, private Chinese companies or even foreign joint ventures to invest overseas. Now it's not only possible, it's encouraged.'


He added that many Chinese companies 'are sitting on huge piles of cash' and have the scope to pull off substantial deals.


Reports last month suggested that Shanghai Automotive Investment Corp, China's biggest car manufacturer, was set to take over MG Rover. Although the move was denied by management at the UK company, it demonstrated the firepower of China's largest companies, Mr Deschandol said.


Tom Jones, a partner in City firm Freshfields Bruckhaus Deringer's Hong Kong office, said: 'There will be more opportunities for foreign law firms because the contracts governing these deals will presumably be governed by foreign law, and so the expertise of international law firms may well be required. That's not to rule out Chinese firms wanting to have an ongoing role.'