by Sebastian Heinrich
E.M.B.L.-HSG XIX. Class - Shanghai Module: “Law and Business in China” (24 August – 29 August 2015)
Shanghai, 31 August 2015. Being amongst the few E.M.B.L.-HSG students to choose the 'Sabbatical option', I joined the program at the beginning of this year. Within the past couple of months I have gathered invaluable insights, knowledge, contacts and many unforgettable moments. There’s a lot to tell about the different places I’ve seen and institutions I’ve been to, the people I have met and the modules I have completed. But let me be straight from the beginning: of all the very exciting and memorable modules that I have attended so far (7 out of 11), Shanghai has not only surprised me the most, it simply exceeded my expectations!
I arrived in Shanghai after my week-long Tokyo module covering “Law and Business in Japan”. Tokyo had always interested me and seeing it for myself was fantastic. From there I took a direct flight to Shanghai rather unprepared and from what I had heard so far not necessarily thrilled. I arrived early in the morning, took a cab to the hotel, showered and met up with my fellow students to do some sight seeing before the module would start. It was my third time on Chinese ground and after Macao and Hong Kong my first time on the mainland. Standing at the Bund in front of the Huangpu River, it literally took the first sight onto the world’s most awe-inspiring skylines, to be blown off my feet and utterly taken by the mere beauty and power of this city.
View from the Bund over the Huangpu Jiang to the Pu-Dong District at night
The first impression of China with its 1.3 billion inhabitants (with strong anarchistic character traits as we learnt); one of the world’s oldest cultures, rich in an over 5000 year history and a politically-economical system where this strong-communistic mind-set and turbo-capitalistic elements co-exist in a paradox and yet ultimately inseparable way; followed us and increased throughout the entire week, especially during the field trips and extra-curricular activities. Despite (or maybe just because of) its seemingly and omnipresent contrariness, you will hardly find a place as inspiring as Shanghai – a city that represents the melting pot of the 21st century and the engine of the largest economy of the world by the year of 2030.
Entrance stone of Fudan University School of Management
Approximately 30 people of different nationalities joined the optional Shanghai module, “Law and Business in China”, on 24th August. Our two cosmopolitan chairpersons, Professor Allen Chan (Managing Director at LGT Investment Management (Asia) Ltd., Hong Kong and Senior Financial Consultant to the President of the Fudan University) and Elliot Papageorgiou, (Executive at the English law firm, Rouse & Co. International and Partner), put all theoretical content in a Chinese and globally related context.
While starting the course with a comprehensive overview of the political, economical, social and legal history and recent development of China, with a focus on the roots as well as internal and external influences of the Chinese Legal System, we got a more practical taste of the region by experiencing traditional Chinese and Shanghai cuisine as a lunch break surprise before concluding the day participating in a traditional Chinese tea ceremony at the historic premises of the Xiangye Fu Tea House, which we visited upon invitation of LGT Investment Management Ltd.
Our candidates at the Xiangye Fu Tea House
Jiuqu Bridge in the Yu Garden at night
On the second day, our chairman Elliot awaited us together with Brendan Kelly (Partner at Baker & McKenzie LLP in Shanghai with over ten years of China tax advisory experience) for a lecture of “Accounting and Taxation” and “Intellectual Property (IP) Law”. Still moved by the vivid introduction into the tax and legal implications of investments in China and the specialties of cross-border transactions, in the evening some of us went to a restaurant in the “French Concession”, a distinctive district of Shanghai reminiscent of the French settlements agreed on in the 1850s by the French Consul of Shanghai.
Fudan University School of Management, morning classes
Wednesday morning welcomed us with a lecture on Competition Law in China, effective from 2008 and mainly covering the Anti-Monopoly Law (AML), followed by a great overview of In-house Legal Practice by Eloise Maki, an IP Attorney-at-Law at 3M for an impressive period of almost three decades. The afternoon concluded with an area of particular interest for those aiming to work in China on Labour and Social Security Law. In the evening we went down to Nanjing Road for a couple of drinks and on to the popular expat bar and lounge “Sascha’s”.
Nanjing Road East at night
Tired but excited I found myself in a class of special interest for myself. The Thursday morning class on “M&A in China and beyond” provided me with invaluable insights into China’s investment trends from Equity Joint Ventures to Wholly Foreigner-Owned Enterprises (WFOE) and outbound M&A as well as Strategic Alliances. Furthermore, we were introduced to the Chinese Industrial Guidance Catalogue, which categorises deals in “encouraged”, “permitted”, “restricted” and “prohibited” transactions. The morning basically covered all characteristics of the Chinese M&A market such as challenges of asset- and share deals including their inherent tax implications, deal-breakers along the Due Diligence process as well as requirements for a successful Post-Merger Integration (PMI).
Min Hang District Court building
A well-diversified field trip and guided tour through the stunning Min Hang District Court (in appearance, a mixture of the White House and the Washington Capitol building) compensated us for the interesting but rather theoretical start to the day. For a bit of spiritualism and more history we visited the Buddhist Jing’an Temple at the West Nanjing Road dating back to 250 AD amidst the 21st century glass-front skyscrapers and ended our tour at Rouse & Co. International LLP, where Elliot works and where we had the opportunity for a Q&A session about the Chinese Court System. We celebrated this truly multifaceted day over a fabulous dinner at the marvellous Henkes restaurant upon invitation of Rouse & Co. Forgetting all exhaustion, we enjoyed great music and a nightcap with a wonderful view over Shanghai at night at Bar Rouge.
Culture clash: Jing’an Temple in front of modern glass-front skyscrapers
A very colourful presentation of the challenges international business people are facing when operating in China rounded off the week with lectures on “White Collar Crime Prevention – Lessons Learned from Practice” and “Branding and Marketing in China”. It unequivocally demonstrated that a successful business plan in China requires a much stronger brand and risk awareness than anywhere else in the world.
After lunch the party split into individual working groups to prepare their particular presentations to be held on Saturday morning, on either of the pre-defined subjects: “China Competition Policy”, “Civil Litigation in the Chinese Legal System”, “Chinese Tax & Accounting”, “China’s Position within international Bodies”, “Foreign Investment in China” and “Intellectual Property in China”.
View from the Bund over the Huangpu Jiang to the Pu-Dong District daytimes
Each group had to appoint one speaker to report within 15-20 minutes and clarify open questions from the audience for another 5-10 minutes. I have to admit that it was rather challenging to dig deep into the Chinese legal system and practice, which, to a huge extend, is comprised of various elements and influenced by a threefold heritage of traditional Confucian principles, highly-regulative socialist-style law of 1949’s Mao revolution and European civil-law style laws (since the 1980s). In the end, however, everyone accomplished the given tasks very well and judging by the discussions at the farewell reception on Saturday afternoon, I know that this module not only highly enhanced and broadened our knowledge and understanding of Chinese law but has also been an invaluable over-all experience for my professional and personal future.
I would like to take this opportunity to thank all participants, my teachers and the MBL-HSG administration for all I’ve seen and learned and would like to encourage all of you who might still be indecisive about whether to attend this module in next years’ classes to do it. You will know I was right as soon as you get back!
Qibao Old Town in the Minhang District, Shanghai