As capital markets resurrect, how can businesses capitalise on opportunities amid risks and nagging uncertainties? Experts from leading domestic and international law firms share their insights with Claire Zhao
IN JULY, in a vivid display of market momentum, six gongs were lined up and struck simultaneously at the HKEX to celebrate the listings of five companies and one exchange-traded fund on the same day.
Since late last year, the Hong Kong IPO market has shown consistent signs of revival, building into a long-awaited resurgence throughout this year. A July report from Goldman Sachs indicates that fundraising totals on the HKEX for the first seven months have already surged past last year’s full-year figure by 41%. But does this current fervour in the capital markets signify a broad-based recovery?
Undercurrents continue to swirl. Astute market participants recognise that this recovery diverges fundamentally from those of the past. Listing in Hong Kong is no longer a mere carnival of capital; it has evolved into a strategic manoeuvre within a broader landscape of geopolitical tension.
Amid the market volatility, how can companies discern trends and identify structural opportunities? How, too, might legal teams transcend their traditional roles to provide forward-looking support for strategic decision making and global operations? For China Business Law Journal’s mid-year market research, our editorial team visited domestic and international law firms, seeking insights from managing partners and senior practitioners on these pressing questions.
The research reveals that a company’s core competitiveness lies not in avoiding all risks, but in turning constraints into strategic advantages. To navigate today’s geopolitical turbulence and rapid evolution of technical regulations, Chinese enterprises must shift from “passive compliance” to “proactive rule integration” – a transformation in which legal teams are now positioned to play a crucial role.
First green shoots
“In recent months, we have seen an uptick in enquiries and engagements for IPOs,” observes Danielle Roman, managing partner at offshore law firm Mourant’s Hong Kong office. She outlines the shift in client demand as one that “possibly represents an improvement in the exit environment in contrast to the more challenging past couple of years”.
Hong Kong’s IPO market is showing clear signs of revival, with a notable surge in listings by mainland Chinese companies. According to Goldman Sachs, 51 companies listed on the HKEX up to 16 July, raising HKD124 billion (USD15.9 billion), compared to 77 listings raising HKD88 billion throughout 2024. Ten of this year’s listings were dual A+H share offerings, while more than 200 companies are now in the pipeline.
Mainland Chinese companies are increasingly favouring Hong Kong as a preferred destination for IPOs, with many A-share listed firms having either announced or completed secondary listings in the city under an A+H share structure. According to Wang Yuan, a senior partner at Jia Yuan Law Offices and director of its Shanghai office, this trend reflects both the financing needs of portfolio companies and exit demand from investment funds.
“Key factors include slower A-share IPO approval processes … combined with the current geopolitical climate, which has made US listings less attractive for Chinese companies,” he says. “The shift has sustained momentum in Hong Kong’s IPO market.”
Zhang Rongsheng, a partner at Jingtian & Gongcheng in Beijing, says China’s A-share market continues to uphold a stance of strict regulation. “Although the Star Market has begun accepting applications under the ‘fifth set’ of listing standards – signalling a gradual return to normalised review procedures – the market remains somewhat cautious,” he says. “As a result, a significant number of mainland companies deliberating between A and H shares are ultimately opting to list in Hong Kong.”
The fifth set of listing standards values a company based on its technological innovation and market potential, rather than its current financial performance.
Despite a persistently challenging fundraising environment, Roman observes that both larger and emerging managers continue to launch new products – even as some take longer to raise funds than in previous years. She also notes the rise of bespoke structures and project-specific funds, reflecting caution among both investors and managers.
The surge in corporate restructuring and M&A has continued in 2025. Vicky Lord, managing partner at Harneys’ Shanghai office, attributes this trend to macroeconomic volatility and ongoing regulatory reform, prompting companies to reassess capital structures and seek greater operational flexibility amid financial uncertainty.
“Many companies look for ways to cut costs and implement synergies by restructuring their subsidiaries in China and optimising their setup in China,” says Ulrike Glueck, managing partner at CMS China’s Shanghai office. She notes that investors are increasingly acquiring assets or shares in areas that complement their core operations or divesting non-core businesses. Similarly active are private equity firms, which – armed with ample capital reserves and operational expertise – are acquiring and revitalising distressed companies, while also targeting startups with advanced technologies and specialised know-how.
Fast-tracked transformation
Amid deglobalisation and technological upheaval, the global economic architecture is undergoing a systemic overhaul, with supply chain and trade frameworks shifting towards greater diversification, regionalisation, sustainability and digitalisation. As China’s economy pivots from expansion-led growth to qualitative upgrading, domestic companies are redefining their globalisation strategies.
Catherine Guo, a partner at Anli Partners based in Beijing, says international trade is bearing the immediate brunt of the climate of geopolitical uncertainty. “The convergence of abrupt shifts in tariff policies, mounting pressure to reconfigure supply chains, and intensifying geopolitical rivalry is directly impacting companies’ operational costs and strategic planning,” she says
Yet, opportunities for international expansion persist. Lord, of Harneys, highlights that “high-growth emerging economies in Central Asia, Africa and Latin America” are particularly noteworthy. New energy firms are accelerating overseas expansion, and biopharmaceutical companies are increasing investment in innovative drug pipelines despite headwinds.
Wei Xin, a director and founder of RICC & Co in Shanghai, believes cross-border expansion and industrial chain collaboration help unlock significant growth opportunities for companies. “Going global allows companies to access larger international markets, securing greater resources and customers,” he says. “At the same time, supply chain co-ordination enables businesses to integrate upstream and downstream resources, combine complementary strengths, reduce production costs, and enhance operational efficiency – strengthening their competitiveness within global value chains.”
As the restructuring of global supply chains accelerates, trends towards regionalisation and localisation are becoming more prominent. In response, China is advancing its bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Digital Economy Partnership Agreement (DEPA). Simultaneously, it is deepening regional economic co-operation through its Belt and Road Initiative and efforts to establish a free trade area for the Asia-Pacific.
As Chinese companies expand overseas, Tang Zhoujun, an equity partner at Zhong Lun Law Firm in Beijing, sees considerable potential in Southeast Asian markets. “Despite the rising tide of deglobalisation in recent years, regional integration is accelerating in key emerging markets, particularly Southeast Asia,” he says. “This unlocking of market potential has established the region as a prime destination for Chinese enterprises seeking new growth opportunities abroad.”
New frameworks for international economic co-operation support global expansion and raise the bar for cross-border compliance and dispute resolution practices. Take the automotive sector as an example: Between 2021 and 2024, China’s vehicle exports surged from 1 million to 6.4 million units, ranking first globally for two consecutive years in 2023 and 2024. This rapid expansion marks the industry’s entry into a new stage of “in-depth globalisation”, where manufacturers face increasingly complex cross-border compliance challenges.
In the past five years, the Shanghai International Arbitration Centre has handled more than 2,400 arbitration cases related to the automotive sector, with disputed amounts exceeding RMB38 billion (USD5.3 billion), underscoring international disputes. Guo, at Anli, notes: “National automotive technical regulations, such as the EU’s carbon emission rules and data localisation requirements, vary significantly across markets. Companies expanding overseas must remain agile in adapting to local policies.”
Eva Wang, the Beijing-based COO of Fangda Partners, believes new trade agreements such as the Regional Comprehensive Economic Partnership and the DEPA will push greater emphasis on rules of origin and the structuring of cross-border investments.
While regional integration and localisation reshape global industry, technology is accelerating a deeper realignment – transforming supply chains and creating fundamentally new models of value creation.
Against the backdrop of US-China technological decoupling, sustainable access to key technological equipment has emerged as a critical corporate risk, accelerating China’s push for technological self-reliance. The country’s biopharmaceutical sector exemplifies this dynamic shift.
According to Wang Weibin, managing partner at Beshining Law Office in Shanghai, the national volume-based procurement policy has spurred a wave of generic drug approvals, prompting companies to challenge originator drug patents through invalidation claims and pharmaceutical patent linkage proceedings. Meanwhile, China’s innovative drug industry, developing steadily since 2010, has in recent years become a major participant in global novel drug transactions.
At the same time, disruptive technological breakthroughs, exemplified by artificial intelligence, are fuelling growth in digital asset trading and virtual reality applications. Lord notes that companies are increasingly investing in digital innovation to fast-forward their businesses. “Digitalisation creates opportunities to improve customer experience and develop new revenue streams through innovative products and services,” she says.
Zeng Tao, a Shanghai-based senior partner at Hansheng Law Offices, says: “As digital economic integration accelerates, technologies such as artificial intelligence and big data are proving instrumental in driving industrial advancement and innovation in business models.”
According to official figures from China’s National Data Administration, the country has developed more than 100 large-scale AI models with more than 10 billion parameters. These models are being extensively deployed across critical sectors such as electronics, healthcare, intelligent transport and e-commerce, enabling more than 100 commercial application scenarios.
The year 2025 is widely regarded as the “dawn of the intelligent agent era”. Kevin King, a partner at Jin Mao Law Firm in Shanghai, believes a new wave of industrial transformation is already underway. “Businesses should strategise early to secure first-mover advantages in emerging fields, thereby driving innovation and upgrading their operations.”
This has also spurred new demands for algorithm patenting and data compliance. “On one hand, technological innovations in areas like AI model architecture and training methods have now reached patentability thresholds, pushing companies to build protective barriers through patents,” says Wang Weibin. “On the other hand, fragmented patent examination standards globally are complicating application strategies, necessitating careful alignment of technical disclosure methods with claim design to mitigate eligibility risks.
“As Chinese enterprises accelerate their global expansion, we are witnessing a surge in demand for cross-border intellectual property protection,” adds Wang. “This is particularly evident in the critical need for comprehensive Freedom-to-Operate (FTO) analyses before international market entry, as well as in developing practical strategies to navigate international technology restrictions.”
Wang specifically cautions pharmaceutical manufacturers against inadequate infringement risk assessments when launching products overseas, and highlights disputes over service invention ownership resulting from the mobility of key technical personnel.
“We recommend establishing a dynamic global FTO mechanism to keep pace with evolving international regulations, while implementing standardised ownership agreements and inventor management systems to mitigate risks associated with talent mobility,” he says.
Zeng, of Hansheng, observes that amid a surge in technology ownership disputes among innovation-driven enterprises, IP infringement risks are escalating. “Both the cost and complexity of enforcement are rising … Businesses must transition from reactive litigation to proactive risk control,” he says.
“Many Chinese enterprises tend to prioritise market expansion when venturing overseas,” remarks Eva Wang, of Fangda, “yet overlook the importance of establishing a robust global intellectual property framework.” Without systematic trademark and patent protection, businesses may face risks such as product counterfeiting, technology infringement, and even customs detentions. She therefore recommends that businesses implement a holistic IP strategy prior to entering new markets and establish rapid enforcement mechanisms in key jurisdictions.
New competitive barriers
This year is set to witness an explosion in corporate compliance demands. Chinese enterprises expanding overseas face increasingly complex legal and regulatory environments abroad. The adoption of AI and digital transformation has introduced significant new risks, including data leakage, algorithmic ethics concerns, and IP disputes. This rapidly evolving regulatory landscape is creating new forms of competitive barriers within the compliance domain.
Eva Wang notes that “penetrative and whole-chain” supervision in capital markets is becoming standard practice, significantly raising legal compliance requirements for companies in areas such as financing, M&A and information disclosure.
Kevin Huang, a Shanghai-based partner at Commerce & Finance Law Offices, says that geopolitical factors are driving frequent upgrades to export controls, trade barriers and sanctions targeting China’s high-tech and sensitive sectors – particularly semiconductors and 5G communications – by the US and Europe.
In response, Eva Wang advises: “Amid escalating US-China tensions and tightened multilateral scrutiny, companies must establish multi-jurisdictional compliance review mechanisms in early project stages, and incorporate ‘trigger clauses’ or termination rights into agreements to address sudden changes in sanctions or export controls.”
Another key focus of compliance regulation lies in data governance and personal information protection. China has introduced a series of regulations and industry standards – including the Network Data Security Management Regulations, the Public Security Video and Image Information System Management Regulations, and the Personal Information Protection Compliance Audit Measures – which further elaborate and expand the obligations established under the Cybersecurity Law, the Data Security Law, and the Personal Information Protection Law.
Glueck, of CMS China, points out: “Companies must prioritise data protection to maintain trust, comply with evolving legal requirements, and innovate responsibly in the digital economy.”
Globally, businesses are experiencing a significant increase in demand for cross-border data flows. Zoe Zhou, Wei Tu Law Firm’s managing partner based in Guangzhou, notices the diminishing importance of physical operations to e-commerce, banking and financing, medical treatment and other industries.
A growing number of companies are exploring business models that allow them to serve global customers without a local physical presence, leveraging digital means to achieve international market reach. “In such a context, companies start to look at the regulatory regime and rules for cross-border data transfer and service delivery,” she says.
In technology-driven sectors, the deepening application of AI and the evolution of international data governance frameworks have made the establishment of an integrated compliance system a standard requirement for companies. Jeff Yang, a director and senior partner at Wang Jing & GH Law Firm based in Guangzhou and Shenzhen, says: “Building a ‘macro-compliance’ framework encompassing antitrust, personal information protection and advertising compliance has become essential for internet enterprises.”
Anli’s Catherine Guo adds: “Regulatory frameworks governing cross-border data flows have become a central challenge for companies expanding overseas. Compliance requirements in areas such as data security and privacy protection are driving increased demand for preventive legal services.”
Huang, at Commerce & Finance Law Offices, advises businesses to closely monitor variations in data protection regulations across jurisdictions. “Stringent regulations such as the EU’s General Data Protection Regulation require companies to assume responsibility for the entire lifecycle of user data, with severe financial penalties for violations,” he says.
“In contrast, some emerging economies maintain more lenient frameworks but exhibit high enforcement unpredictability, often leaving companies in a state of ‘compliance ambiguity’.” He cautions that Chinese cross-border e-commerce companies operating in Europe without proper data governance could face substantial fines, or even suspension of operations, with little warning.
Zeng, of Hansheng, says companies should pay close attention to the EU’s Artificial Intelligence Act, enacted last year, particularly the dual compliance challenges it presents alongside China’s Data Security Law.
Eva Wang emphasises that, as cross-border data regulations continue to mature, companies should establish interdisciplinary data compliance response mechanisms and develop tailored management protocols aligned with the specific processing pathways of different business lines.
In the field of IP, emerging issues such as copyright identification for AI-generated content (AIGC) and the boundaries of fair use for training data are presenting new compliance challenges for businesses. Zhu Zhiwei, a Shenzhen-based partner at King & Win Law Firm, cites data showing that Shanghai courts concluded 50,000 IP cases last year, with total compensation amounts surging by 132.4% year-on-year. Among these, cases involving emerging areas such as AI and e-commerce livestreaming saw a notable increase.
Zhu recommends that companies clearly define ownership rights of AIGC works through contractual agreements, establish compliance review mechanisms for data sources, and prioritise the use of properly licensed or anonymised data.
At the same time, algorithm-driven employment models are redefining the boundaries of labour relationships, creating new compliance challenges, particularly in flexible working arrangements, remote offices, and emerging talent-related disputes.
According to a work report released by the Shanghai High People’s Court during the annual legislative sessions of the National People’s Congress and the Chinese People’s Political Consultative Conference, last year local courts concluded 1,223 cases involving disputes in new forms of employment covering food delivery riders and ride-hailing drivers. These cases are driving advancement in the criteria used to determine labour relationships.
Zhu suggests that companies develop classification guidelines for flexible employment, clarifying the rights and responsibilities of all parties through platform agreements and task-specific rules.
RICC’s Wei Xin adds: “Businesses must reassess the balance between compliance requirements and workforce flexibility to identify the optimal approach.”
As corporate social responsibility compliance expands into broader environmental, social and governance (ESG) dimensions, ESG compliance has become a critical interface for companies seeking to access green financing in capital markets and meet international supply chain standards.
While most companies have yet to fully integrate ESG principles into governance and investment strategies, Mourant’s Danielle Roman anticipates growing demand for aligning fund documentation with ESG disclosure standards to meet regulatory and investor expectations.
Lord, of Harneys, observes: “Those that engage in sustainable development stand to gain a competitive advantage and attract environmentally conscious consumers and investors.”
Glueck highlights that, for the Chinese market, leading technologies and industrial collaboration prospects in new energy vehicles and other strong sectors will be of interest to European investors.
Yang, at Wang Jing & GH Law Firm, says: “This is an emerging market driven by sustainability. Green economy initiatives and responsible investment are evolving into commercially viable sectors with long-term value.”
Yet compliance is not the end goal. John Liu, a partner at Anli Partners based in Beijing and Shanghai, says: “For Chinese companies, safeguarding their interests should not stop at administrative compliance – they must also proactively evaluate opportunities for procedural challenges … and seek a voice in shaping evolving regulations.”
Mechanisms such as international carbon tariffs and green supply chain standards illustrate how compliance requirements now function as both technical barriers and instruments of influence in global trade.
Liu Xinhai, a Shanghai-based senior partner at Yingke Law Firm, concludes: “In the tide of globalisation, Chinese enterprises ‘going global’ entails not only the export of capital and technology, but a strategic contest for influence over the rules of the game.”
