Today we looked at the business stucture of Hong Kong from a slightly different perspective. We visited Paul Weiss, a law firm in Hong Kong’s financial district. As our host Marcia Ellis detailed, the firm’s Hong Kong office specializes in mergers and aquisitions as well as in private equity funds. The firm does not deal greatly in IPO work because of its competetive nature, making the cost of this service too low for Paul Weiss’s fees. Ellis noted the specialization that the firm has taken with respect to media and telecom work. Examples of these very “sensetive in China” companies include The Discovery Channel and AOL. Because China has in recent years reverted back to its strict regulatory practices in terms of the media, the firm has seen a lot of growth in this area. Ellis went on to explain why she believes the Chinese government is tightening its control over the media. She explains that an obsession over the idea of a color revolution in China has motivated the government to strictly monitor the information that reaches the country’s citizens through the various forms of the media. This control is now affecting many internet companies as well. Paul Weiss advises its internet clients on how to deal with increased monitoring of content as well as how to deal with a growing number of regulations.
Ellis also spoke briefly about private equity funds. Using Morgan Stanley as an example, she described that the company has been very successful in its investment in basic consumer goods such as milk, and batteries. Stanley did well to focus on the growing income of the population. As predicted, the consumption of basic consumer good would grow along with the income, helping MS in “making a killing.”
We also spent time in the discussion of other topics such as the Kyoto accord, and its policy on carbon credits, the importance of relationship cultivation in Chinese culture, liscensing agreements, arbitration, etc. She also gave us some details on documentation. In terms of joint ventures, a contract must be in Chinese as one of its languages. This fact again emphasized the importance of learning Mandarin in order to do business in China. When the contracts are drafted, both language versions can be equally valid. The version not in the Chinese tongue, however, cannot take precedence.
After speaking with Mrs. Ellis we had the pleasure of meeting Andrea Richi who is in charge of the marketing and hiring for the Paul Weiss office in Hong Kong. She gave us a short history of the firm and led us in a tour of the office which had spectaular views throughout. She noted the feng shui influence observed in many office buildings in China, and she too noted the importance of speaking Mandarin in order to work in Hong Kong.