August 13 Regulatory Roundup

Sunday, August 13, 2006 10:04
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New M&A Regulations:
Overall Impact Rating: 10 of 10
Industries Affected: All
Date of Implementation: September 9 , 2006

Overview/ Introduction:
In Tuesday, the Ministry of Commerce released the new regulations focused on the buyout of Chinese firms. The highly anticipated regulations, set up a more stringent litmus test to ensure that future purchases of Chinese assets are in the best interest of the nation and its markets. the most scrutiny will be reserve for the largest of deals, however these regulations may have a large impact on industries where there is a perceived idea that foreign investment is already too high.

Government Agencies Involved:
Ministry of Commerce
State Administration for Industry and Commerce

Links for further Information: China Daily; Easy Bourse; Shanghai Daily; Forbes

New Real Estate Compensation Regulations:
Overall Impact Rating: 5 of 10
Industries Affected: Real Estate Development
Date of Implementation: September 1, 2006

Overview/ Introduction:
On both a national and local level, new regulations have come out to ensure the “proper” compensation of residents when they are resettled from their house and/or land. On a national level, the new regulation is specific to the compensation and resettlement of farmers when their land is used to build a future power plant, while in Guangdong, the new regulations are for the compensation and resettlement of farmers when their land is taken for a broader range of industrial development.

With the desired affect of these regulations to reduce the unrest associated with the movement of people from their land, companies opening greenfield factory locations will see an increase in startup costs.

Government Agencies Involved:
State Council

Links for further Information: People’s Daily; China Daily; Reuters

No More Nepotism :
Overall Impact Rating: 3 of 10
Industries Affected:
Date of Implementation: August 1, 2006

Overview/ Introduction:
In another effort to further strengthen the integrity National, provincial, and local governments, new guidelines prohibiting nepotism have been released. Critical to many in Beijing, this new regulation will hopefully begin a process whereby checks and balances can be maintained. With little teeth in the regulation though, the overall affect may be limited.

Government Agencies Involved:

Links for further Information: People’s Daily


(Note: To make sure you are up to date on all regulations, we advise you speak with legal and/ or industry professionals to ensure you have the most up to date and industry specific information)

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