Chinese take away foreign firm rules

The Chinese Ministry of Justice has pledged to allow law firms to open in more than one city a move which will see City firms flock there in order to take advantage of an expanding legal market.

The China Ministry says it will lift the geographichal restrictions on law firms when China joins the World Trade Organisation.

Currently, foreign law firms are allowed only one office in China.

Firms say this will kick-start China's legal market. And if the plans goes ahead, law firms say twin bases in the mainland commercial centres of Beijing and Shanghai would significantly boost operations.

Denton Hall's chairman James Dallas confirms his firm is interested, saying: "We are keen to open a second office in Shanghai.

"From the recommendations of our Beijing and Hong Kong offices, Shanghai would be the most appropriate place."

Doug Markel, managing partner of Freshfields' Beijing office, is more cautious. "This is certainly good news for firms, but the proof is in the pudding. We will have to wait and see to what extent China fulfils its pledges,"he says.

Markel says multi-national clients are based in Beijing because this is where they can get government approval for major infrastructure projects. But he has his eye on Shanghai, which he dubs "the economic powerhouse of China".

He says Shanghai is set to become China's major financial centre.

Baker & McKenzie partner Peter Knight also welcomes the news, saying: "Our firm would welcome any relaxation in the rules, and it would also benefit China's economy."