Legal minefield awaits Chinese newcomers

Different legal systems in different countries add to headaches

The number of legal disputes is rising as more Chinese enterprises enter the African market, lawyers in China say.

Wang Li, director of Deheng Law Firm in Beijing, says "legal issues should be the first thing to consider when Chinese firms plan to tap into the African market".

She says many of her firm's clients have focused only on local connections and policies when they do business in Africa, resulting in a multitude of legal disputes.

As former colonies, many of the African countries have adopted the legal systems they inherited from their colonial eras.

"Even the African countries that are not developed have quite developed legal systems," Wang says. "There are completely different to that of China."

Deheng Law Firm had previously worked with British and United States counterparts to serve clients, but in recent years it has taken on the responsibility of solving its own legal problems. Founded in 1993, the firm now has over 30 offices in China and 150 overseas partners, with more than 1,600 lawyers and agents handling cases.

Wang and her team have served many Chinese companies, state-owned and private, in cases that cover international trade, mergers and acquisitions, finance and insurance, private equity and mineral acquisition. The investment destinations include Cameroon, Ghana, Kenya, South Africa, Libya, Nigeria, Seychelles, Tanzania, Zambia, Gabon and Equatorial Guinea, among others.

China's investments in Africa have diversified in recent years. While oil and mining remain an important focus, investment has flooded into everything from shoe manufacturing to food processing, according to a report in 2013 by PricewaterhouseCoopers.

Deheng Law Firm, through the platform of the China-Africa Business Council, has bridged the gap between Chinese and African companies that are in need of legal help.

Recently in December, the firm introduced the Nigerian Stock Exchange to the Chinese National Equities Exchange and Quotations to discuss possible cooperation.

However, Wang says a mechanism is needed to settle disputes between China and African countries.

In June 2014, Wang, together with over 100 Chinese entrepreneurs, and Li Yuanchao, China's vice-president, attended the China-Tanzania Investment Forum in Dar es Salaam, capital of Tanzania. At the forum, Wang discussed details of a possible dispute resolution mechanism with the Tanzania Investment Center.

"This mechanism is intended to solve the troublesome legal process in Tanzania," Wang says. "We hope this will be a start for better legal collaboration between China and Africa."

yangyao@chinadaily.com.cn

(China Daily Africa Weekly 01/23/2015 page20)