July–August 2009

China Business
Review
The

Mixed
Signals
Interpreting China’s
M&A Regime 18

Also
Anticorruption
Due Diligence
for M&A 22

Venture Capital 40
Healthcare 32
Recession Proofing 48
China’s Changing Civil Service 36

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 July–August 2009 Vo l u m e 3 6 N u m b e r 4

China Foto Press

China begins to chip away at monopolies—in a way that raises some questions.

China Business
Review
The

Focus: Mergers and Acquisitions

Merger Control under China’s Antimonopoly Law: The First Year 18
Three recent merger cases reveal how MOFCOM will conduct antitrust reviews.
Matthew Bachrack, Cunzhen Huang, and Jay Modrall

Conducting Anticorruption Due Diligence in M&A Deals 22

Companies subject to the FCPA must conduct effective anticorruption due diligence to avoid future liabilities.
Richard Grime and Bingna Guo

chinabusinessreview.com July–August 2009 3

 Features
H E A LT H C A R E
China’s Healthcare Reform 32
The new reform plan holds mixed news for foreign companies.
James A. C. Sinclair
18 G OV E R N M E N T A F FA I R S
Understanding China’s Changing Civil Service 36
Companies can improve their government relations by understanding the background
of the officials they deal with.
Kenneth Jarrett and Lie Huihan

V E N T U R E C A P I TA L
A New Welcome for Venture Capital 40
22 The new Growth Enterprise Market and relaxed rules for onshore funds offer greater VC
investment opportunities.
Calvin Ding and Tony Zhang

E M P L O Y E E H E A LT H
How to Reduce Hepatits B in the Workplace 44
General Electric China Co.’s experience shows that the benefits of an
HBV vaccination program outweigh the costs.
Stephen A. Maloy

32
Departments
Letter from the Editor 5
Short Takes 6
Snapshots of recent China headlines

China Market Intelligence 11

The Role of China’s Think Tanks in Policymaking

40 China Conference Calendar 12

China-related events near you

USCBC Bulletin 14
A recap of past events

Letter from Washington 16

Pragmatism Meets...What?
John Frisbie

Commentary 48
44 Target the China Market to Ride out the Recession
Sigmund Floyd

China Deals 53
Cover design by Jesse Marth A listing of recent China-related business deals

The China Business Review welcomes articles from outside contributors. Manuscripts
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4 July–August 2009 chinabusinessreview.com

 Letter from the Editor China Business
The

Review
A s we look back at the China Business Review’s (CBR )
first year, we wonder what the US-China business
community was concerned about in the summer of
Editor Virginia A. Hulme, vhulme@uschina.org
Associate Editor Paula M. Miller, pmiller@uschina.org
Assistant Editors Daniel Strouhal, dstrouhal@uschina.org
Business Manager Jesse Marth, jmarth@uschina.org
1974. Articles from the July-August issue of the CBR Administrative Assistant Mattie Steward
show that companies were still learning the basics. The Art Direction & Production Jon Howard/JHDesign, Inc.
issue featured articles titled “How to Export to China,” Research Assistants Julia Zhao, Diane Hsiung
“Introduction to Exhibiting in China,” “How to Open a Inquiries and Subscriptions: publications@uschina.org
Bank Account in China,” “Health and Customs for Web: www.chinabusinessreview.com
Visitors to China,” and a page on the American Reprints: For bulk custom reprints (min. 100),
Industrial Report, a publication by the National Council call 1-800-960-1195
for US-China Trade (as the CBR’s publisher was then known), listing and Online store: www.uschina.org/store
explaining US products to potential Chinese buyers in Chinese. ADVERTISING
In those days, Chinese buyers had little knowledge of American products, and North America–Uhry & Associates
the articles on exporting to China and exhibiting in China stress the importance 1117 East Putnam Avenue, PMB 306, Riverside, CT 06878
of getting enough copies of company materials into the right hands. They also
Northeast: Peter Uhry
explain the delay that could occur when sending English-language materials. In Tel: 203-637-5478 Fax: 203-698-1725
one case, a US company that sent its materials to China did not receive a reply E-mail: uhry@sbcglobal.net
for a year, even though the Chinese recipient was interested and set its translators
to work on the materials as soon as they were received. Northeast & Midwest: Ed Winslow
The July-August 1974 issue also reported on the first Annual Meeting of the Tel: 203-838-7985 Fax: 203-838-9660
E-mail: ewinpub@gmail.com
National Council for US-China Trade. Giving testament to the excitement
surrounding, and importance of, these first connections between modern Southeast & Mid-Atlantic: Ned Frey
China and the United States, Secretary of State Henry Kissinger delivered the Tel: 757-259-5907 Fax: 757-259-6804
keynote address, and the National Council received congratulatory letters from E-mail: nfrey@cox.net
its counterpart in China, the China Council for the Promotion of International West & Southwest: John McCarthy
Trade, as well as from several prominent members of Congress. Tel: 818-706-8066 Fax: 818-706-8326
Foreshadowing the ability of Chinese manufacturers to churn out items E-mail: johnmccarthy1@sbcglobal.net
suitable for nearly every market on earth, “How China is Adapting to the
Japanese Market” described how Chinese manufacturers changed food China–Publicitas China
Beijing: Nancy Sun
packaging, sold bicycles under Japanese brand names, and changed textile Rm 1108, Derun Tower, No. 3 Yong’an Dongli
manufacturing processes to meet the specifications of their Japanese customers. Jianwai Avenue, Chaoyang District
On a lighter note, the CBR ’s “world sports reporter filed this colorful Beijing 100022 China
report”: Tel: 86-10-5879-5885 Fax: 86-10-5879-3884
E-mail: nancy.sun@publicitas.com.cn
“Skinned knees and elbows dripped foreign blood on Chinese soil one Sunday
during the Spring Canton Fair as a team of beefy German businessmen defeated a
Shanghai: Isabella Hou
spirited British club 2 to 0 at soccer on Canton’s Provincial People’s Football Room 701, Wise Logic International Center, No. 66
Ground.... Shanxi Road North
“...The game was played...with a Shanghai-made Lion brand ball, which to the Shanghai 200041 China
satisfaction of the China Light Industrial Products Corporation, retained its shape Tel: 86-21-5116-8877 Fax: 86-21-5116-0678
E-mail: isabella.hou@publicitas.com.cn
and bounce throughout the game. That was more than could be said for the players
themselves.” South China: Sherry Yuan
Rm 1108, Derun Tower, No. 3 Yong’an Dongli
The article had no byline, but one wonders whether it was written by the same Jianwai Avenue, Chaoyang District
person who wrote rather colorfully about prices at the Spring Canton Fair: Clark Beijing 100022 China
Tel: 86-10-5879-5885 Fax: 86-10-5879-3884
T. Randt, Jr., who joined the National Council’s delegation to the fair that year
E-mail: sherry.yuan@publicitas.com.cn
and later served as US Ambassador to China under President George W. Bush.
Speaking of colorful coverage, we at the CBR would like to know whether, Hong Kong–Publicitas Hong Kong Ltd.
after 35 years, the magazine is still fulfilling our readers’ needs for insightful Rana Rizvi
coverage of China business developments. Please take a moment to fill out the 25/F & 26/F, Two Chinachem Exchange Square
338 King’s Road
survey on p.9 and mail it to China Business Review, 1818 N St. NW, Ste. 200, North Point, Hong Kong
Washington, DC, or fax it to 202-833-9027. Of course, we love to hear from Tel: 852-2516-1516 Fax: 852-2528-3260
our readers on any topic; please write to me at vhulme@uschina.org. E-mail: rana.rizvi@publicitas.com

OFFICE OF THE PUBLISHER

The US-China Business Council
1818 N St., NW, Suite 200
Washington, DC 20036
Virginia Hulme Tel: 202-429-0340 Fax: 202-833-9027

chinabusinessreview.com July–August 2009 5