Attitudes within China’s Ministry of Commerce (Mofcom) towards FDI are shifting as officials attempt to become more savvy about capital investment and try to gain a better perspective as to what corporations need and want.

“China is at a tremendous turning point,” says Rocky T Lee, partner and head of the China venture and private equity practice at law firm DLA Piper. He should know: in a rare move, Mr Lee has been appointed vice-chairman of the China Council for International Investment Promotion (CCIIP), a government-sponsored body under the purview of Mofcom.


CCIIP plays a significant role in directing and co-ordinating the reform of regulatory processes and requirements relating to FDI in China. Mr Lee’s position with CCIIP gives him an exclusive seat at Mofcom’s table as the only international lawyer allowed to comment on draft Chinese rules and regulations in connection with venture capital, private equity, fund formation and crossborder mergers and acquisitions. He says: “The reason I have been offered the opportunity to participate is because Mofcom knows that we handle a lot of M&A and private equity deals. On more than one occasion, I have debated and negotiated M&A rules with the regulators. Lawyers understand the mechanics of the rules.”

China boost

Although the Chinese government does not make public its intentions when it comes to considering or reviewing FDI and new rules and regulations governing it, Mr Lee believes that Mofcom is genuinely interested in learning and exploring new ways to make China more attractive for investment. He says: “This is a very interesting development in that, while it is not the first time the government has reached out in this way, it is one of the rare instances where it has sought out the advice of foreign companies in a relativity transparent fashion.”

CCIIP has access to Mofcom’s senior policy- and law-makers, and often reviews and comments on draft laws and regulations. Examples of significant legal issues that are being reviewed are: foreign-invested, renminbi-denominated fund formation; and foreign investment by venture capital and private equity firms.

Investor insight

Mr Lee is able to provide Mofcom with the corporate perspective on what they are looking for and how rules and regulations might impact upon them. He has worked extensively on China corporate M&A and private equity matters. He says: “Mofcom wants to find out what makes investors tick. For example, what type of returns are they seeking? How can the government help them to find these opportunities in regions needing foreign capital or help under-invested industries to be more attractive?”

It is a quid pro quo. Mr Lee gets an insight on the mindset behind China’s rules and regulations; and the government learns why investors consider certain industries and regions, as well as why investors do not look at China’s western regions or other industries. Mr Lee says: “The dialogue is interesting. For the first time, I am personally able to see why certain rules and regulations are set. It now makes more sense and this greater level of policy understanding helps us to understand the rules and regulations better.”

While CCIIP is involved in drafting rules and regulations that govern investment, Mr Lee points out that his involvement with the council is solely to act as a sounding board on those proposals that are put before him.

He says: “We don’t know if what they give us will soon be law, is only a draft, or is something they are just running past us for feedback. We also do not know if our recommendation will be implemented or ignored.”

But the fact the Chinese government is even giving him access is a giant step forward.


Curriculum Vitae

Rocky Lee

2008 DLA Piper, Head of Asia venture and private equity practice

2007 Asia Legal 500 Cited as the top VC/PE lawyer in Asia

2006 DLA Piper, Head of China venture and private equity practice