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PEER PRESSURE is a real thing, but so is peer support. Lately, confronted with mounting compliance and regulatory pressure, seemingly non-rhythmic industry swings, and concerns in global markets, China¡¯s in-house counsel often find comfort in the sharing of both relatable experiences and acute insights from fellow legal practitioners as their community looks towards a new year with hopes for clarity, certainty and potential for growth.

To gain insight into the opportunities and challenges awaiting in-house counsel this year, China Business Law Journal invited five legal team leaders, hailing from a variety of industries, to discuss their team building agenda, expectations, trepidations and manoeuvres to stay ahead in the game in 2024.

Zhong Xueyin

China Business Law Journal: What opportunities and challenges are expected from 2024?

Zhong Xueyin: Lately, many speak of downgrading consumption in China, which at the corporate level translates as improving efficiency and lowering cost. However, Caocao is a company still aspiring for growth, with room to increase market share. In these situations, functions like legal often bear the brunt of cost pressures.

The demand for business growth is easily voiced, but becomes challenging to achieve when staff and costs in the back-end departments cannot be increased. In services like ride-hailing, in which Caocao is engaged, litigation and legal work are tied to the number of orders and volume of business, arising in tandem with the business activities.

Naturally, there¡¯s a collective desire to boost operational efficiency by becoming more systematic, automated and template-driven, yet this task is also easier said than done. Implementing standardisation and creating templates also add to the workload, while the practical benefits of AI tools like ChatGPT for enhancing work efficiency remain under observation.

In summary, I believe the challenges are quite apparent, but they also present opportunities. When everyone is facing challenges, can we respond to difficulties more effectively?

CBLJ: What legislative, regulatory or policy updates may significantly impact your company¡¯s legal affairs this year?

Zhong Xueyin: I pay particular attention to the legal aspects of two sectors, starting with the new dynamics in capital markets. It has been a year since the filing requirement was put in place for overseas listing, and it has had a significant impact on the IPO market, raising several questions.

For instance, are variable interest entity (VIE) agreements completely acceptable under this filing system? What level of capitalisation should there be within a group when a member goes public? There is considerable debate in the market on these issues, and the process of finding clarity is ongoing.
In terms of macro policy, will market access regulations be relaxed or tightened? If the A-share market is tightened, might there be a relaxation in opportunities for overseas fundraising? We still face significant uncertainty in this regard.

Another focus is on the laws and regulations related to data compliance, personal privacy and information security. In the past two to three years, the trend towards clarification and stricter regulation in this area has been evident, with an increasing number of enforcement cases.

Nevertheless, this is a highly specialised and emergent field. Can we find a suitable external professional team to help us address complex issues? Facing an increasingly intricate regulatory environment for information security and personal data protection, can our own team keep up with these rapid changes? I find this area quite challenging.

CBLJ: In terms of team management, how do you plan to continually enhance the team’s strength and cohesion?

Zhong Xueyin: In the KPIs [key performance indicators] I¡¯ve set for my team, there¡¯s a section dedicated to self-learning. This could involve areas not directly related to work, but which we deem necessary to learn about, such as investment and data knowledge.

Daily work can be tiring, and systematic learning often falls into the category of important but not urgent, leading to less personal growth. Therefore, I¡¯ve established clear priorities and task attributes for personal learning.

Also, I recently came across an interesting twist on the financial term EBITDA (earnings before interest, taxes, depreciation and amortisation). In a work context, it¡¯s been humorously redefined as ¡°earnings before interest, therapy, depression and anxiety¡±.

It¡¯s inevitable to encounter negative emotions in the workplace, especially in a support-oriented department like legal. Therefore, I believe it is crucial as a manager to help the team resolve negative feelings, maintaining motivation and happiness, particularly in an era where business growth may decelerate.

Huang Huina

China Business Law Journal: What opportunities and challenges are to be expected from 2024?

Huang Huina: By the end of 2023, China¡¯s renewable energy power station installations exceeded 50% of total power capacity, surpassing thermal power for the first time. Worldwide, the push for clean energy continues. We expect the global demand for renewable energy, the investment trend in renewables and the engagement of Chinese firms in overseas clean energy projects to persist in 2024. Nonetheless, as Chinese companies grow their international presence, they face increasing challenges.

In the past year, with the EU¡¯s anti-subsidy rules in effect, multiple countries including the US launched anti-tax evasion probes against Chinese PV component firms, and Brazil removed import tax benefits for PV components. These changes in international laws call for new approaches for Chinese power companies¡¯ overseas expansion. Thus, close attention to host countries¡¯ legal and judicial risks, along with political developments, is crucial to navigate the opportunities and challenges of 2024.

CBLJ: What legislative, regulatory or policy updates may significantly impact your company¡¯s legal affairs this year?

Huang Huina: In 2024, we anticipate the EU will offer more guidance on filings under its anti-subsidy regulations, and we look forward to practical case analyses and recommendations from law firms, both domestic and international. Furthermore, we are closely monitoring global policy trends on Chinese PV and wind turbine component imports, and anti-evasion taxes including Brazil¡¯s recent move to revoke foreign PV component tariff exemptions.

Additionally, the recently revised Company Law will be implemented starting in July, introducing new requirements for corporate governance and director responsibilities. As a global Chinese state-owned enterprise, how to align the new stipulations of the Company Law with the actual circumstances of our subsidiaries both at home and abroad ¨C and how this alignment can aid the development of our international business ¨C is a new issue we need to study in depth.

CBLJ: What are your team¡¯s key new year agendas?

Huang Huina: China Power International will persist in developing new ventures like integrated intelligent energy and refine our compliance management systems in the new year. In 2023, we achieved certification for the ISO 37301 compliance management system from the British Standards Institution (BSI), becoming one of the first in China¡¯s overseas investment sector and a pioneer in the power industry abroad to receive this certification.

Due to the complex nature of new business models which, compared to traditional centralised projects are more prone to disputes and compliance issues, special attention must be given to the legal and regulatory risks in host countries.

Additionally, we will persist in applying domestic expertise and energy management service models to enhance our overseas compliance systems, using compliance to drive business growth and aiming to lead international development among state-owned power industry enterprises.

CBLJ: In terms of team management, how do you plan to continually enhance the team¡¯s strength and cohesion?

Huang Huina: Firstly, cultivate and maintain a proactive attitude towards new environments, technologies and business models, applying both legal and commercial thinking to specific business areas. As business transformations and new ventures arise, in-house counsel must keep their specialisation while swiftly acquiring new skills and knowledge to match business evolution. The China Power International legal team will keep engaging on the front lines, learning and honing skills to provide solutions for the most practical and cutting-edge issues.

Secondly, while addressing legal risks, we will place greater emphasis on business risks, maintain commercial awareness, and consider the long-term comprehensive development of projects from the company¡¯s larger perspective.

Thirdly, we will maintain close ties with affiliate entities, upstream and downstream companies, external consultants, and professional institutions, as well as invite industry experts for exchanges and training to further enhance our team¡¯s professional expertise.

CBLJ: What are your expectations for overall development of the legal industry in the new year?

Huang Huina: As market competition intensifies and the ¡°going global¡± strategy advances, state-owned enterprises face a more complex legal landscape, highlighting the growing importance of legal professionals in business development. Serving as a bridge for internal and external communication, in-house counsel encounter increasingly diverse challenges with business expansion. We must play a proactive role from both the external environmental and internal motivational perspectives to effectively support the company¡¯s core business for stable and long-term success.

Additionally, we aim to leverage the positive role of the legal community to foster collaborative win-win relationships between in-house counsel and external lawyers. We expect lawyers to thoroughly understand our business model to offer comprehensive, needs-based services with the ability to solve real-world problems, providing forward-looking support and assistance. Looking ahead, we anticipate the legal industry to offer more comprehensive legal protection and support, helping to drive sustainable growth and development for businesses.