Chinese Legal Professionals Expand Globally Amid Geopolitical Shifts
As geopolitical tensions continue to rise, Chinese legal professionals are increasingly focusing on protecting overseas assets, particularly in countries involved in the Belt and Road Initiative. This shift is driven by a combination of factors, including the growing presence of Chinese companies abroad and a strategic push from Beijing to ensure that legal services align with national interests.
Chinese law firms are making significant inroads into the global legal services market. The demand for their services has grown as more Chinese companies expand their international operations. Many prefer to work with Chinese lawyers due to a sense of trust, shared language, and cultural familiarity. However, winning over clients from other regions remains a challenge, especially in an environment marked by increasing geopolitical tensions.
Beijing has been encouraging legal professionals to offer their services abroad to safeguard Chinese assets as the Belt and Road Initiative enters its second decade. This initiative has become a cornerstone of China’s trade and investment strategy, with a focus on fostering economic cooperation across Asia, Africa, and Europe.
According to data from the Ministry of Justice, as of last year, Chinese law firms had established 207 offices overseas, with over 35% located in countries participating in the Belt and Road strategy. This represents a 70% increase from 2018, when there were only 122 such offices. The expansion reflects a broader trend of Chinese law firms seeking to establish a global footprint.
Liu Zhiqiang, a lawyer and executive director at Yingke Law Firm’s office in Budapest, Hungary, emphasized the importance of adapting to changing times. He stated that for the Chinese legal profession to innovate and grow, going global is not just an option but a necessity. “Lawyers play an important role in supporting Chinese companies in their global expansion,” he said.
Much of this expansion occurs in countries part of the Belt and Road scheme. By the end of 2023, over 17,000 overseas Chinese companies had been established in these countries, with a combined direct investment of $40 billion. This figure represents a 31.5% increase from the previous year, highlighting the rapid pace of Chinese business expansion.
Chinese law firms typically operate on a small scale when expanding internationally. They often provide business consultation and dispute resolution services, while also facilitating communication between Chinese clients and government officials. Additionally, they coordinate legal matters with host countries, ensuring that Chinese companies can navigate foreign legal systems effectively.
For many small and medium-sized Chinese companies, choosing Chinese lawyers is seen as a cost-effective and practical decision. Liu noted that the shared language, cultural familiarity, and ease of communication make Chinese lawyers a preferred choice. Moreover, they are viewed as more trustworthy when it comes to national security and the protection of sensitive data.
In the context of rising strategic rivalry with the United States, China has tightened its grip on national security and expanded its legal tools to counter foreign sanctions and long-arm jurisdiction. Clients often question whether sensitive information can be safely entrusted to foreign law firms. Liu pointed out that in situations involving major national interest, the reliability of a firm becomes a critical concern.
Some large state-owned Chinese companies have even asked about the location of law firms during the tender process, specifically checking if they are based in Five Eyes countries—the intelligence alliance comprising the UK, US, Australia, New Zealand, and Canada.
Terence Wong, a partner at the Hong Kong-based law firm Loeb & Loeb, described the current moment as pivotal for the Chinese legal profession. He noted that Chinese law firms are no longer merely pursuing global expansion for prestige but are now serious players in international legal services. These firms leverage their deep ties with Chinese companies to offer comprehensive support.
Wong also highlighted that many Chinese law firms are aligning their global strategies with national initiatives, positioning themselves as both commercial and policy-savvy partners to the Chinese government. Zhu Cuiying, director of the Seoul office of Chinese law firm DeHeng, echoed this sentiment, noting that geopolitical considerations influence the decisions of Chinese companies expanding overseas.
Zhu provided an example of a Chinese company operating in South Korea that might need to reconsider its ownership structure and supply chains to meet the stringent requirements of the U.S. market. Liu in Budapest agreed, emphasizing that the biggest challenge for Chinese companies abroad lies in the increasing geopolitical tensions, which have led to new policies restricting Chinese products in the EU.
China is Hungary’s largest trading partner outside the European Union, and leading Chinese electric vehicle makers like BYD and battery firm EVE Energy have set up production bases in the country. Wong, based in Hong Kong, also pointed to the geopolitical factor, noting the increased scrutiny of Chinese law firms and their clients.
He emphasized that Chinese law firms must evolve in terms of capability, brand positioning, and strategic thinking to make a lasting impact globally. “Watching how they overcome these challenges will be fascinating over the next decade,” Wong said. “Gaining the trust of non-Chinese clients and breaking into truly international mandates is still a work in progress.”
