Foreign Direct Investment (FDI) into China will double over the next six years, according to a new report from international law firm King & Wood Mallesons (KWM) (@). As the report outlines, foreign direct investment in China will reach 1.3 Trillion GBP by 2020. And as Ashley Armstrong (@) reported in The Telegraph, relying on the same report: “British investment in China is set to quadruple over the next five years, far outstripping the [overall] doubling of foreign direct investment in the fast-growing economy over the same period.”
At the same time, as Bloomberg reports (@), China has now proposed an overhaul of the country’s foreign investment rules to make it easier for foreign investors to access the market via a new, streamlined regulatory regime.
Hong Kong: Main trans-shipment point for China investment
News of the projected growth in Chinese foreign direct investment coupled with efforts to make the country more appealing to foreign investors, highlight Hong Kong’s central role as the trans-shipment point for the vast majority of foreign investment both into and out of China.
As Frank Chen outlined in EJ Insight (@) late last year: “During the seven months to July , FDI flow from Hong Kong amounted to US$49.4 billion, representing almost 70 percent of China’s total (US$71.1 billion) for the period.”
Hong Kong legal market characterized by opportunity and competition
As the Hong Kong Trade Development Council (@) has outlined: Hong Kong’s legal services sector is central to facilitating the trans-shipment of China’s foreign direct investment. “As of April 2014”, the HKTDC reports, “822 local solicitor firms and 75 foreign law firms [had some presence] in Hong Kong, including more than half of the Global 100 law firms.”
As the Legal 500 (@) sums up, however, “Hong Kong remains one of, if not the most competitive legal market in the world.” So while increased foreign investment and deregulation reflect profound opportunity for law firms – the marketplace where most legal services related to China FDI take place – Hong Kong – remains to studied observers of the market – hyper-competitive.