One-Belt-One-Road

As a national strategic program, the Belt and Road initiative has made remarkable achievements. The trade volume between China and countries along the Belt and Road, in which China has invested more than US$50 billion in aggregate, reached more than US$3 trillion from 2014 to 2016, according to President Xi Jinping’s speech in an international Belt and Road forum in Beijing in May 2018. Chinese companies have entered 56 economic and trade co-operation zones built in more than 20 of these countries. To date, there are about 50 national-level state-owned enterprises (SOEs) taking part in co-operation projects located in countries along the Belt and Road.

Sparing no effort to support and motivate central SOEs’ participation in the Belt and Road, the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council has drafted the Guidelines on Preventing Legal Risks Specific to Countries along the Belt and Road, and the Guidelines on Compliance Management of Central Enterprises, which provide additional legal bases for corporate counsel work relating to the Belt and Road.

The rising number and size of businesses going global highlights the increasing importance of legal risk and its related compliance control. Outgoing Chinese companies should be aware of the difference in jurisdiction by taking a “rule of law” approach. Moreover, they should be more alert on violation and involvement in trade malpractices with US embargoed countries.