China may be an economic superpower, and any firm will tell you how important the country is to its global strategy. But the painful truth is that few of them make much money in the PRC, and some has already started mulling over potential exits or downsizing exercises.
This week’s cover story in The Lawyer sheds some light on the unprecedented pressure on revenue and profitability among international firms in China. Apart from external factors such as the economic slowdown, regulatory restrictions and fierce competition, some consider international firms’ business model as their own worst enemy.
But not everything is gloomy in China. The newly-launched free trade zone in Shanghai, poised to be a pilot scheme in the country’s further economic reforms, will bring a new horizon of opportunities to international advisers. Perhaps Vinson & Elkins, which is closing in Shanghai, will now have second thoughts?
Lastly, today marks the beginning of a week-long National Day holiday in China and Hong Kong. A good time to sit back, relax and maybe catch up on some reading.
Also on TheLawyer.com:
- Manulife’s Asia GC Steven Yeo uses the Chinese philosophy of ‘yin and yang’ to safeguard the insurance company’s strong growth across Asia
- This week’s South Korea special report looks at how the business is going in newly established foreign legal consultant offices
- The Vinson & Elkins China reshuffle continues as two partners move to Europe
- DLA Piper has hired a four-lawyer IP team from Jones Day’s Beijing office, led by partner Horace Lam who will join as head of IP in China