Ming Zhou said the question posed on Australian Chinese dealings was no longer ”Is it worthwhile to take the risk in doing business with China?” but is instead “How to manage the risk in dealing with China?”

This is the dilemma faced by many longwall equipment and service companies who have dipped their toe in Chinese business waters or are planning to make the splash in the short to medium term future.

In the past few years’ more and more Australian companies are venturing into China, establishing businesses like joint ventures or tendering special projects. This experience has lead to reduced obstacles posed by cultural and linguistic differences.

Now the obstacle facing companies is managing legal risks in contractual disputes. Zhou’s paper presented at The Resources and Energy Law Association (AMPLA) National conference in Adelaide last month dealt with this concern.

“Ideally, Australian corporations contracting with China should be able to manage their transnational legal contractual disputes risks, where an Australian domestic law governs the sale contract with Chinese party, and the contract has a ‘closest and most real connexion’ with Australian jurisdiction,” Zhou said.

“This would mean that an Australian court is competent to adjudicate the dispute in the event of a breach by the Chinese party, and an Australian court judgment could be enforced in China where the Chinese party has assets.

“If so, Australian businesses will have a greater control of the cross-border dispute resolution process as the disputes are heard and decided by Australia courts which Australian corporations have confidence and knowledge.

“Accordingly, the risks and costs of doing business with China will be significantly reduced as the rule of law is being observed.”

Ming Zhou has been admitted to practise in the Supreme Court of Victoria and on the Roll of High Court of Australia. His professional practice includes a wide range of commercial and property transactions and advisory work, with special emphasis on the sale and purchase of business, commercial leasing and foreign direct investment in China.