10 July 2017
Manifesto Lays Groundwork for Belt and Road Opportunities
With more than 60 countries covered under China’s Belt and Road Initiative, the rise of cross-border investment and trading is expected to lead to greater demand for professional legal services. The Law Society of Hong Kong has drafted a related agreement called the Hong Kong Manifesto, and in May, signed the pact with 38 legal organisations from 22 countries and regions along the route. As it sets out to promote a coherent model for businesses and trade to follow, the agreement also promotes Hong Kong position as Asia’s centre for professional legal services.
Thomas So, President of the Law Society of Hong Kong, explains how the manifesto was the culmination of work by the Law Society’s Belt and Road Committee, which also explored the role of Hong Kong’s professional legal services under the global development blueprint.
What is the idea behind the Hong Kong Manifesto?
The Belt and Road Initiative will spur economic activity and numerous cross-border investments. Given that the 60 participating economies have different legal systems, the Law Society believes it is necessary to push forward a model to allow corporations and investors involved in Belt and Road projects to trade and negotiate using the same legal language and game rules. At the same time, the Society plans to set up a legal information platform for the Belt and Road Initiative to provide information on basic investments and regulations, as well as local legal advisory services for the Belt and Road countries.
One of the goals of the Hong Kong Manifesto is to harness members’ power to promote legal interaction and strategic cooperation through annual or bi-annual conferences to explore the challenges and opportunities of the Belt and Road Initiative, as well as relevant legal issues for investors. The Society also plans to establish a Belt and Road Lawyers Alliance with the All China Lawyers Association to construct a closer relationship with the lawyers from the Belt and Road countries, and connect with legal professionals around the region through Hong Kong’s platform to grasp opportunities in this development.
How will Hong Kong’s legal sector benefit from the Initiative?
The Belt and Road Initiative involves many large-scale cross-border infrastructure projects and formulation of commercial agreements, which will drive up demand for legal services related to cross-border legal disputes. Many Hong Kong lawyers are experienced in the matter as they have been handling trading and investment-related legal matters in the Chinese mainland and Southeast Asia since the 1980s and 1990s. The only difference is that they were helping overseas investors to handle legal matters in the mainland and Southeast Asia, but this time, the Belt and Road Initiative mainly serves mainland corporations and investors investing in Belt and Road countries.
Whereas it was overseas companies investing in the mainland in the past, the relevant legal matters were handled by Hong Kong international firms. As many of the senior legal experts that have explored their business in the mainland have now established their own firms, many mainland enterprises looking to explore overseas markets will choose them to handle matters for them. This is a coming trend.
Investment projects in the Belt and Road are huge in scale, often involving multiple regions. These international investments require the coordination of professional services up to international standards, including international law and dispute resolution mechanism. The quality of Hong Kong legal professionals are beyond doubt, and along with a well-established legal system and a free market, Hong Kong can assume the role of a hub to handle commercial disputes over Belt and Road investments. Hong Kong follows the common law. Our independent judiciaries, reliable and transparent regulatory mechanisms, the rule-of-law, as well as impartial attitudes, are all recognised internationally.
How can the legal sector best prepare for opportunities arising from the Initiative?
Hong Kong people might not be familiar with the Belt and Road countries and regions. To visit these regions and handle legal matters might not be as comfortable as handling agreements for sale and purchase of property or IPOs. Cultural differences might prove a challenge, but it is truly an experience that is hard to come by.
To promote Hong Kong’s advantages in the Belt and Road Initiative, the government and professional institutions must work together. The Society has developed a good partnership with the Hong Kong Trade Development Council (HKTDC). Through participating in many HKTDC events – including the Belt and Road Summit and SmartHK held in many Chinese mainland cities, as well as In Style • Hong Kong held in Southeast Asian countries – the Society helps promote the advantages of Hong Kong professional legal services and explore a wider market.
In order to pass on the experience and guarantee the professional standards of the industry, the Society plans to apply for government subsidy to run training courses to encourage new lawyers, especially those working in small- and medium-sized firms, to equip themselves, take up the challenge, and welcome the opportunities brought about by the Belt and Road Initiative.