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China-related banking and finance has grown in prominence this year as the relative liquidity of Chinese banks has led to a large number of outbound M&A financings. Chinese companies have continued to make outbound acquisitions in a number of sectors that are historically of interest to domestic companies, such as oil and gas, mining and natural resources, and manufacturing....

China-related banking and finance has grown in prominence this year as the relative liquidity of Chinese banks has led to a large number of outbound M&A financings. Chinese companies have continued to make outbound acquisitions in a number of sectors that are historically of interest to domestic companies, such as oil and gas, mining and natural resources, and manufacturing. However companies also seem to be becoming decidedly more audacious in their outbound investments as they look to make less customary acquisitions in high-end technology, international brands and trademarks. While the traditional areas of investment still comprise the overwhelming majority of Chinese acquisitions, the rate of growth in high-end and branding sectors is certainly increasing.

Australia continues to be a key destination for outbound acquisition financing for natural resources. There has also been a high level of interest in less traditional geographic regions such as South America and Africa.

Chinese banks have also supported major investments in the project finance sector across Southeast Asia, with several seminal deals this year heralding the first time that Chinese banks have led international syndicates in project financings.

While interest in more common project sectors such as Chinese clean energy continues, Chinese banks have also led project financings for hotels, infrastructure and commercial projects in nearly every developing economy across the region.

International banks continue to lead in inbound acquisition financings, while both domestic and foreign banks play a key role in pre-IPO financings for Chinese companies.

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2011 has brought much negative press about Chinese companies being undervalued by international investors on the New York Stock Exchange and Nasdaq due to questions of accountability, transparency and corporate governance. There has also been an increasing level of talk about potential "go-private" listings, where Chinese companies plan to de-list from US exchanges and perhaps re-list in Hong Kong or Singapore....

2011 has brought much negative press about Chinese companies being undervalued by international investors on the New York Stock Exchange and Nasdaq due to questions of accountability, transparency and corporate governance. There has also been an increasing level of talk about potential "go-private" listings, where Chinese companies plan to de-list from US exchanges and perhaps re-list in Hong Kong or Singapore. In these cases, the presumption is that Asian investors who could "better understand" the companies would have increased opportunities to buy shares on the region's exchanges and thus bring up the stock price. "At this point, much of the talk of go-private work in the market is speculative," says one leading partner. "How much these really take off remains to be seen."

Despite this however, there seems to be no noticeable slow-down in Chinese companies wishing to list in the US and overseas. Either way, the level of listing and de-listing advising that will be required in the future means that both Chinese and international firms' capital market practices should have a robust pipeline of work moving forward.

Perhaps related to the perception of Chinese companies getting a poor shake on the US markets, A and H-shares listings have become increasingly popular as a way for companies to provide investment opportunities to both Chinese and international investors.

On the debt side, Rmb-denominated bonds (dim sum bonds) have skyrocketed in popularity. While the first deals were done in 2009, this past year has brought a flood of Rmb-denominated bond work to both domestic and international capital markets practices.

The bonds are especially sought after by international investors who do not have direct exposure to Rmb-denominated assets because they are constrained by China's capital control regime. The dim sum bond market allows entities to issue Rmb-denominated bonds on the Hong Kong Stock Exchange, theoretically giving Chinese investors increased opportunity to carry bonds in Chinese companies. As dim sum bonds become more popular, it will remain to be seen whether this work will remain with the region's more high-end firms or becomes more commoditised throughout the market.

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Inbound and outbound M&A both remain alive and well in China related deals, and both areas seem to show few lingering effects of the financial crisis. This year's most exciting action on the outbound side illuminates one of the most significant continuing trends in the M&A space, as more and different types of companies are venturing beyond China's borders for acquisitions....

Inbound and outbound M&A both remain alive and well in China related deals, and both areas seem to show few lingering effects of the financial crisis. This year's most exciting action on the outbound side illuminates one of the most significant continuing trends in the M&A space, as more and different types of companies are venturing beyond China's borders for acquisitions.

While Chinese companies have historically sought targets in the natural resources, mining, oil and gas and low-end manufacturing sectors, there seems to be a growing trend for Chinese companies to make more high-tech, strategic acquisitions. Chinese companies are becoming increasingly likely to target European or American international brands and to prioritise buying an overseas, established brand as part of their growth strategy. There is also increasing interest in buying high-end technology in the high-tech and life sciences sectors, rather than solely developing technology in-house. While the majority of outbound acquisitions are certainly still in the more historically popular sectors, the tendency for Chinese companies to target technology and intellectual property at an increasing rate is a sure trend.

On the inbound side, foreign companies still show a strong interest in acquiring Chinese manufacturing and materials targets.

Joint ventures between foreign-owned companies and Chinese entities also seem to be becoming increasingly common. Foreign companies seem to be slowly gaining confidence regarding the prospect of entering into joint ventures with Chinese and state-owned companies. One prime example of this is the recent joint venture by The Walt Disney Company and the state-owned Shanghai Shendi group for the creation of the new Shanghai Disneyland. The deal, which has been nearly ten years in the making, represents one of the largest foreign investments into a joint venture in China's entertainment industry and could be indicative of more such arrangements to develop in the future.

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The growth of the Chinese private equity market does not seem likely to be slowing down any time soon. International private equity houses have been increasingly prioritising using Chinese currency for their investments and developing Rmb-denominated funds with domestic partners....

The growth of the Chinese private equity market does not seem likely to be slowing down any time soon. International private equity houses have been increasingly prioritising using Chinese currency for their investments and developing Rmb-denominated funds with domestic partners. All of the major international private equity players have recently been teaming up with Chinese counterparts in order to tap the expanding market. This is good news for the legal community across the board, as both international and domestic firms have an important role to play in bringing these types of funds to fruition.

In fact, Rmb-denominated private equity funds have been growing at faster rate than the traditional dollar-denominated funds, due to the fact that they are more flexible. For example, Rmb funds can be used for otherwise restricted expenses like pre-IPO financing.

Related to the private equity hunger for access to these funds, the Shanghai government announced a pilot program in January 2011 that would allow foreign private equity funds to directly invest in China by allowing some qualified foreign private equity investors to convert foreign currency to Rmb. With the program, Shanghai hopes to maintain its place as a premier financial centre in China and further attract international private equity investment. How the program will develop in scope and satisfaction for these select qualified foreign investors remains to be seen.

On the fund formation side, there is an increasing trend for Asian financiers to start up their own, all-Asia private equity funds. These past years have seen key figures from leading financial institutions leave their international posts to start up these types of funds, and the trend continues.

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China-related project finance has certainly been picking up this past year. While experienced partners will tell you that there still isn't exactly a dearth of projects available, several factors have contributed to the growth of the sector this year....

China-related project finance has certainly been picking up this past year. While experienced partners will tell you that there still isn't exactly a dearth of projects available, several factors have contributed to the growth of the sector this year.

The liquidity of Chinese banks has been a large part of the emerging project finance landscape across Asia, and Chinese banks often play a role as one of several banks investing into projects both inside and outside of China. "Chinese banks have a lot of capital," says one partner at a domestic firm, "and they're getting braver when it comes to ways to invest their money."

Interestingly, Chinese banks have done several projects this year where they have actually led in financing projects in Southeast Asia. Chinese financial entities have had a leading role in financing development, resources and infrastructure from the Philippines to Indonesia. Sectors like energy, mining and natural resources, commercial developments should all continue to show solid growth, especially since the former are still considered traditional strategic investments for the state. Thus, indisputably, banks and state-backed financial entities are a key reason for the growth of project financings in Asia.

State-owned enterprises play a strong role in China-related project finance, while international firms often have a leading role in serving as international counsel to companies looking to invest in China. One prime example of this can be seen in the new Shanghai Disneyland development, which represents a joint venture between the Walt Disney Company and the state-owned Shanghai Shengdi group. International firms played a key role in the in-country project financing, as they negotiated a role for both parties in this unprecedented deal. Shanghai Disneyland will be one of the largest ever investments into China for an entertainment development project, and the arrangement between Chinese sponsors and Walt Disney is unlike anything either side has agreed to before.

The increasing momentum in the project finance sphere should mean that international firms who have strong relationships with Chinese financial entities will be well-positioned to capitalise on this trend in the near future.