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Interpreting China’s M&A Regime 18
Also Anticorruption Due Diligence for M&A 22
Venture Capital Healthcare Recession Proofing China’s Changing Civil Service
40 32 48 36
ALL EYES ON THE FAR EAST
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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
Focus: Mergers and Acquisitions
Merger Control under China’s Antimonopoly Law: The First Year
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
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
H E A LT H C A R E
China’s Healthcare Reform
The new reform plan holds mixed news for foreign companies. James A. C. Sinclair
G OV E R N M E N T A F FA I R S
Understanding China’s Changing Civil Service
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
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
General Electric China Co.’s experience shows that the benefits of an HBV vaccination program outweigh the costs. Stephen A. Maloy
Letter from the Editor Short Takes
Snapshots of recent China headlines
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China Market Intelligence
The Role of China’s Think Tanks in Policymaking
China Conference Calendar
China-related events near you
A recap of past events
Letter from Washington
Pragmatism Meets...What? John Frisbie
Cover design by Jesse Marth
Target the China Market to Ride out the Recession Sigmund Floyd
A listing of recent China-related business deals
The China Business Review welcomes articles from outside contributors. Manuscripts submitted for consideration should be sent to the editor at firstname.lastname@example.org. The US-China Business Council obtains licenses for all rights to articles and artwork published in the CBR. Articles or artwork published in the CBR may be reprinted or reproduced only with the written permission of the US-China Business Council. Articles in the CBR do not reflect US-China Business Council policy, unless indicated. The China Business Review (ISSN 0163-7169) is published bimonthly by the US-China Business Council, 1818 N Street NW, Suite 200, Washington DC 20036-2470, USA (Tel: 202-429-0340), a nonprofit organization incorporated under the laws of the District
of Columbia. Periodicals postage paid at Washington, DC, and additional mailing offices. Postmaster, please send address changes to the China Business Review, 1818 N Street NW, Suite 200, Washington DC 20036-2470, USA.(c)The US-China Business Council, 2009. All rights reserved. Annual Subscription Rates: $135 US/Canada and $177 international, print only; $156 US/Canada and $208 international, print and online; $105 online only. Single copy issues: $22, $35 airmail; issues over 1 yr: $15, $20 airmail. DC residents add 5.75% sales tax. Subscriptions to the China Business Review are not deductible as charitable contributions for Federal income tax purposes.
4 July–August 2009 chinabusinessreview.com
Letter from the Editor
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 1974. Articles from the July-August issue of the CBR show that companies were still learning the basics. The issue featured articles titled “How to Export to China,” “Introduction to Exhibiting in China,” “How to Open a Bank Account in China,” “Health and Customs for Visitors to China,” and a page on the American Industrial Report, a publication by the National Council for US-China Trade (as the CBR’s publisher was then known), listing and explaining US products to potential Chinese buyers in Chinese. In those days, Chinese buyers had little knowledge of American products, and the articles on exporting to China and exhibiting in China stress the importance of getting enough copies of company materials into the right hands. They also explain the delay that could occur when sending English-language materials. In one case, a US company that sent its materials to China did not receive a reply 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. The July-August 1974 issue also reported on the first Annual Meeting of the National Council for US-China Trade. Giving testament to the excitement surrounding, and importance of, these first connections between modern China and the United States, Secretary of State Henry Kissinger delivered the keynote address, and the National Council received congratulatory letters from its counterpart in China, the China Council for the Promotion of International Trade, as well as from several prominent members of Congress. Foreshadowing the ability of Chinese manufacturers to churn out items suitable for nearly every market on earth, “How China is Adapting to the Japanese Market” described how Chinese manufacturers changed food packaging, sold bicycles under Japanese brand names, and changed textile manufacturing processes to meet the specifications of their Japanese customers. On a lighter note, the CBR ’s “world sports reporter filed this colorful report”: “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 spirited British club 2 to 0 at soccer on Canton’s Provincial People’s Football Ground.... “...The game was played...with a Shanghai-made Lion brand ball, which to the satisfaction of the China Light Industrial Products Corporation, retained its shape and bounce throughout the game. That was more than could be said for the players themselves.” The article had no byline, but one wonders whether it was written by the same person who wrote rather colorfully about prices at the Spring Canton Fair: Clark T. Randt, Jr., who joined the National Council’s delegation to the fair that year 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, after 35 years, the magazine is still fulfilling our readers’ needs for insightful coverage of China business developments. Please take a moment to fill out the survey on p.9 and mail it to China Business Review, 1818 N St. NW, Ste. 200, Washington, DC, or fax it to 202-833-9027. Of course, we love to hear from our readers on any topic; please write to me at email@example.com.
China Business Review
Editor Virginia A. Hulme, firstname.lastname@example.org Associate Editor Paula M. Miller, email@example.com Assistant Editors Daniel Strouhal, firstname.lastname@example.org Business Manager Jesse Marth, email@example.com Administrative Assistant Mattie Steward Art Direction & Production Jon Howard/JHDesign, Inc. Research Assistants Julia Zhao, Diane Hsiung Inquiries and Subscriptions: firstname.lastname@example.org Web: www.chinabusinessreview.com Reprints: For bulk custom reprints (min. 100), call 1-800-960-1195 Online store: www.uschina.org/store ADVERTISING North America–Uhry & Associates 1117 East Putnam Avenue, PMB 306, Riverside, CT 06878 Northeast: Peter Uhry Tel: 203-637-5478 Fax: 203-698-1725 E-mail: email@example.com Northeast & Midwest: Ed Winslow Tel: 203-838-7985 Fax: 203-838-9660 E-mail: firstname.lastname@example.org Southeast & Mid-Atlantic: Ned Frey Tel: 757-259-5907 Fax: 757-259-6804 E-mail: email@example.com West & Southwest: John McCarthy Tel: 818-706-8066 Fax: 818-706-8326 E-mail: firstname.lastname@example.org China–Publicitas China Beijing: Nancy Sun Rm 1108, Derun Tower, No. 3 Yong’an Dongli Jianwai Avenue, Chaoyang District Beijing 100022 China Tel: 86-10-5879-5885 Fax: 86-10-5879-3884 E-mail: email@example.com
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chinabusinessreview.com July–August 2009 5
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