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Analysis
Chinese SOEs promote general counsel… and external counsel SASAC’s continued efforts to implement a “general counsel system” in state-owned enterprises sends a positive message to law firms
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ix years after the government initiated a campaign to implement a “general counsel system” in state-owned enterprises (SOEs), the majority of the large SOEs have now established an in-house legal function and appointed general counsel. Many of these in-house departments have thrived and proven their value to senior management in a remarkably short space of time. Legal managers and general counsel in these departments have also earned good reputations in the legal community. The in-house legal teams of CNOOC, Bao Steel and Sinopec, for example, have excelled in providing strategic and innovative legal solutions to enable their companies to achieve business and strategic objectives not only in the domestic market, but also in key markets around the globe. As part of the campaign, and in an effort to find the most competent candidates for general counsel positions, the State Assets Supervision and Administration Commission of the State Council (SASAC) started an annual public recruitment program to help appoint general counsel for enterprises under its supervision since 2006. So far, 16 central-level SOEs have appointed general counsel through three public recruitment programs. Last May, a plan to promote general counsel roles in subsidiary companies announced by SASAC marked the beginning of the campaign’s second phase. According to the plan, all important subsidiaries of the centrallevel SOEs should have appointed general counsel and set up an in-house legal function by 2010. China Chengtong Group, a large logistics conglomerate which is a central SOE, is one of the first to respond to the new agenda set by the SASAC. Under the leadership of the
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group’s general counsel, Tang Mingyi, who was appointed through SASAC’s 2007 public recruitment program, the group recently named Wang Yonghai as the general counsel of its important subsidiary, China Asset Management Corporation (CAMC), which manages more than RMB10bn worth of assets. Wang has been and will remain a vice-president of CAMC while he serves as general counsel. With 17 years’ legal experience, in-house and in private practice, he is responsible for the management and direction of the company’s legal team and affairs. He reports directly to the president. As the SOEs are becoming increasingly commercially oriented, international and market-driven, the development of a solid in-house legal function is a good strategy. However, this raises an important question: does the growth of the in-house role translate into reduced business opportunities for external firms? Three years ago, domestic law firms’ perceptions of this issue would have been very different from now, but in today’s more mature and diverse legal
marketplace the majority answers “no”. According to Dacheng’s senior partner, Tuo Zhongming, the promotion of inhouse legal teams in SOEs will improve the legal service industry. “We see the rise of in-house teams led by a general counsel as a positive and necessary development. As large sophisticated organisations, they do need professional legal management,” he said. Tuo has extensive experience working with SOEs, particularly on restructuring projects. He has been the main outside advisor for China Asset Management Corporation since 2000. After the appointment of the general counsel, he continues to provide legal support and advice regarding the company’s business operations and strategic planning. “General counsel and in-house counsel don’t handle all legal matters directly; they are responsible for leading and managing the process,” Tuo said. “The
►► 16 general counsel appointed through SASAC’s public recruitment program 通过国务院国资委组织的海内外公开招聘任命的16位企业总法律顾问 Year 年度 2006
2007
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State-owned enterprise 国有企业 China Eastern Air Holding Company 中国东方航空集团公司 China National Real Estate Development Group 中国房地产开发集团公司 China Railway Communication Group 中国铁通集团有限公司 China National Agricultural Development Group 中国农业发展集团总公司 China TravelSky Holding Company 中国民航信息集团公司 China Changjiang National Shipping Group 中国长江航运（集团）总公司 China Chengtong Group 中国诚通控股集团有限公司 China National Arts & Crafts Group 中国工艺（集团）公司 Sinohydro Corporation 中国水利水电建设集团公司 China National Gold Group 中国黄金集团公司 China Coal Technology Engineering Group 中国煤炭科工集团有限公司 China National Machinery Industry Corporation 中国机械工业集团公司 China Iron & Steel Research Institute Group 中国钢研科技集团公司 China P&T Appliances 中国邮电器材集团公司 Chinatex Corporation 中国中纺集团公司 China New Era Group Corporation 中国新时代控股（集团）公司
General counsel 企业总法律顾问 Guo Junxiu 郭俊秀 Xu Yongjian 徐永建 Sun Yonggang 孙永刚 Wu Gang 吴刚 Li Jinsong 李劲松 Zhao Yufu 赵玉阜 Tang Mingyi 唐明毅 Shi Yuquan 石宇权 Wang Shubao 王书宝 Su Chaohui 苏朝晖 Zhang Zhong 张忠 Wang Qiang 王强 Tang Jianxin 汤建新 Sun Guangcheng 孙光成 Zhang Hongfei 张鸿飞 Xu Genghong 许耕红 ISSUE 6.3