Robert here, writing from sunny Sunny Isles Beach, Florida, where my wife and I call home when I am not traveling in Asia and the Middle East. After being abroad 10 of 12 weeks, it is nice to be here.

I would like to take this opportunity to briefly introduce our readers to a recent and important development in the China M&A market. In the midst of all the doom and gloom in Asia, with the global downturn most definitely reaching the Asia shores in the past few months, there has been a very positive development in China M&A regulations, a development that could dramatically increase M&A activity in the not too distant future.

Although M&A activity in China has seen a big surge over the past decade, government regulations have prevented M&A numbers in China from reaching the full potential in the market. However, on Dec. 6, the China Banking Regulatory Commission (CBRC) took steps to correct some significant limitations, by issuing the Guidelines on Risk Management of Acquisition Loans of Commercial Banks. These allow for the first time commercial banks incorporated under PRC law to make loans to companies for the purpose of M&A transactions, including equity and assets of target companies. This potentially opens the door to leveraged buyouts in China. These new guidelines, in large part, reverses the General Principles of Loans, put into effect in 1996, which forbid onshore banks to provide loans for purposes of a borrower’s equity investments in acquisition transactions.

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Robert here, writing from Hong Kong, where Robert and I are slammed all week. I just now managed to break away from some clients we were having drinks with at Sevva to get on a computer and quickly punch out a new post. I plan to meet these same clients at another location in about 30 minutes, so am typing quickly.

It has been an extremely busy time for us in Asia recently, as there is a lot of pending partner movement in HK / China and we are representing a number of such senior attorneys. We have made a few US associate placements in Asia in the past two weeks, but associate hiring is falling significantly.

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Robert here, writing from Hong Kong, where we just made two more US associate placements last week and expect another one this week. I just arrived back in Hong Kong late last night, after a family holiday in Bali, and planned to return to US today, but a couple of pending partner level placements in Asia by our team has caused a stay in Hong Kong for another 10 days. Robert is heading back here on Friday. Before Bali, Robert and / or I had been in Tokyo and Hong Kong all of November, for the usual meetings with firms and candidates. Actually, you can catch a photo during my last week in Hong Kong in Sunday’s NY Times: Lawyers Wanted, Abroad That Is

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Robert here. Robert had intended to follow up on his article from last week regarding expat packages, but he’s stuck in a hotel in Hong Kong that our travel people chose, called the Garden View, which has a great location on MacDonnell Road but nothing else to recommend it. Not only is the internet down, but the toilet was not even flushed when Robert arrived. Once he’s flushed and reconnected, we’ll get the expat discussion back up on the web…

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This is Robert from Hong Kong, writing on the fly for about 20 minutes, at 2am, after a long day of meetings, late client dinner and before an early flight to Jakarta. We have recently been asked, by both firms and candidates, whether the downturn is changing the landscape of cola / housing / expat allowances (“expat allowance”) in Asia and the Middle East. I have been hit with this question several times this week in meetings and Robert heard it as well two weeks ago in his meetings as well. So this post will deal with the basic expat allowance rates for associates without children. A follow-up post on Wednesday will deal with school tuition subsidies / reimbursement, expat allowance increases for children, and tax related windfalls (in some markets), as well as some commentary as to whether the current high expat allowances are sustainable for the long-term in Hong Kong and Tokyo, as firms expand in Asia and considering the reality that profit margins can be lower in Asia per billable hour than in US markets.

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