China opens legal services market

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Last updated at: (Beijing Time) Tuesday, December 09, 2003

China opens legal services market

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China lives up to the commitments it made during its World Trade Organization talks on opening its legal services market as it has done away with restrictions on the number and location of foreign law firms in the country.

Zhao Dacheng, director of the Attorney General's Department under the Ministry of Justice said Monday that since January 2003, the geographic and quantitative limitations of foreign law offices in China have been done away with and the one-firm-one-office restriction lifted. In 2004, the implementation of the limitation elimination will be strengthened.

Previously, China regulated that foreign law firms can provide legal services only in the form of representative offices only in major cities of Beijing, Shanghai, Guangzhou, Shenzhen, Haikou, Dalian, Qingdao, Ningbo, Yantai, Tianjin, Suzhou, Xiamen, Zhuhai, Hangzhou, Fuzhou, Wuhan, Chengdu, Shenyang and Kunming.

Representative offices could engage in profit-making activities and a foreign law firm could only establish one representative office in China. All representatives shall be resident in China no less than six months each year. The representative office were not to hire Chinese national registered lawyers outside of China.

In November 2001, China promised to eliminate the quantitative and geographic limitations and lift the one-firm-one-office restriction on foreign law firms, when negotiating to enter WTO.

Currently, China has approved 115 law firms of 16 foreign countries to set up representative offices on the Chinese mainland, and 12 of them have opened their second representative offices on the mainland along with four Hongkong law firms.

The representative offices of foreign law firms have offered legal services in China in the sectors like investment, banking, technology transfer, insurance, intellectual property, estate agency, investment and lawsuit arbitration.

Gordon Davis, China Liaison of the American Bar Association (ABA) - Asia, said "China did well in opening its markets after the WTO accession."

Representative offices of foreign law firms have booming businesses in China. Zhao said foreign enterprises, which conducted business in China, always consulted with the representative offices of their own countries' law firms. And Chinese firms, which are developing business overseas, are also tending to turn to their foreign representative offices for cooperation.

The influx of foreign law firms does not threaten Chinese counterparts, but stimulates them to involve in the legal services globalization.

Wang Li, managing partner of Deheng Law Offices, one of China's largest law firms, said that after China's accession to WTO, the overseas business of her law office soared, noting that "previously, our overseas business were only related to Chinese, such as helping Chinese people go through immigration procedures. Over the past two years, our overseas business scope enlarged to help foreign enterprises merge companies, do public bidding, and make purchases."

Deheng also formed branches or partnership organizations in NewYork, Seattle and Florida of the United States and forged cooperative ties with dozens of American peers.

Zhou Liying, partner of Beijing Shouxin law firm, said that the opening of China's legal services market makes it possible for some ace Chinese lawyers to reap the same income as their overseas peers. However, amid China's 100,000-member lawyer contingent, the number of competent lawyers whose legal services quality could meet the international level is still limited.

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