On 9 March Horizons Corporate Advisory partner Lucia Netti and Pier-Domenico Peirone of Pathways (Shanghai) Co Ltd (Horizons Group) participated in a webinar on the impact the COVID-19 epidemic is having on companies and international trade. The webinar was organised by Confindustria Bergamo, an Italian management consulting company.

During the webinar, Ms. Netti and Mr. Peirone discussed how China-based foreign-invested businesses can address the coronavirus situation from a practical standpoint. This included issues related to international commerce such as breach of commercial contracts and how to best manage subsidiaries in China.  

For Mr. Peirone, he addressed the economic measures that Chinese governmental authorities have put forth to help sustain the economy and support all companies, both local and foreign-invested. The most pressing point in this matter is that businesses ensure they are fully in compliance measures put forth by the Chinese governmental authorities. 

More than just compliance, Ms. Netti and Mr. Peirone also shared insights on how enterprises can act to leverage the measures to their advantage.

The underlying message conveyed during the seminar is that foreign-invested companies in China need to figure out quickly how to best manage the coronavirus effect, not only for the now, but for the future going forward. All indications are that COVID-19 is going to have long-term effects for a great many businesses worldwide; that effect is sure to linger for quite some time. 

Despite the “doom and gloom” global atmosphere, we can see that right now in China — the place most affected by the virus — foreign-invested businesses are moving to get fully back on track. However, for them to do so in the most effective way requires paying close, smart attention to the COVID-19 measures set forth by the China authorities.  

For Horizons, our China and Italy offices are working hard together at helping clients have a clear understanding of what both the Measures entail and what are the best practices for businesses in mitigating the effect of COVID-19. 

According to Horizons partner Lucia Myriman Netti, the most pressing issues for China-based foreign-invested companies is the need to address the prospect of “force majeure” clauses in contracts and overall management of China-based companies, which includes the well-being of personal and overall operations.  

“The coronavirus epidemic has had a significant impact on the production and distribution chain,” says Ms. Netti. “Companies were and are in a situation of not being able to fulfill contracts, in whole or in part, because they are unable to produce and supply, or be supplied by third-party suppliers, and then perform the contract in turn. In this period, it is common to talk about ‘force majeure’, but to define if we are really in a situation of ‘force majeure’, it is necessary to analyse, in a very clear and concrete way, the whole history of the transaction. 

“You have to go beyond the general principles of addressing a corporate crisis and find the real problem and then formulate real and applicable solutions that can help companies and reduce risks and damages in practice. Such solutions must be analyzed and evaluated not only for solutions to contractual problems, but also with reference as to how to manage your company or companies in China during this health emergency in a way that it allows enterprises to make use of what’s granted in China. For Horizons, this is at the heart of our serving companies in times of crisis and beyond.” 

If you have questions or concerns related to China Business, Tax or Labour Law or other corporate matters, please contact Horizons at +86 21 5356 3400 or talktous@horizons-advisory.com to schedule a consultation session. From RMB 1,500 per session, Horizons can provide insight, expertise and the right solutions for you. 

Horizons Corporate Advisory helps clients solve complex problems, thrive and be inherently responsible in their business activities worldwide. The countries we operate in include Belarus, Belgium, China, Colombia, Costa Rica, Cyprus, Ecuador, France, Germany, Hong Kong, Indonesia, Italy, Lichtenstein, Luxemburg, Macau, Malta, Mexico, Mongolia, The Netherlands, Nigeria, Portugal, Russia, Singapore, Spain, Switzerland (French and German-speaking cantons), Turkey, United Kingdom (England and Wales) and the United States of America.

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