Once-in-a-decade China leadership shift prompts hopes of revival for corporate and capital markets

International law firms in Asia are eyeing an increase in market activity following the change in China's leadership, citing a possible return to investment by the country's largest companies.

This month saw the confirmation of Xi Jinping as China's new president, succeeding Hu Jintao after almost 10 years at the top of the Communist Party. Jintao's presidency will formally come to an end in March next year, with many lawyers in the region believing the succession will lead to a revival in work levels.

"The leadership change is good news," said Ashurst Asia head Geoffrey Green (pictured). "Everyone has been waiting, hoping that the markets, in particular the equity capital markets, will get better after the Chinese new year."

Other international firms in the region say the run-up to the change in power has resulted in a slowdown in corporate and capital markets work, with many companies postponing investment plans ahead of potential policy changes. 

"There hasn't been a lot of movement in the market, partially because people have been holding off, waiting for the change in government," said Li He, Davis Polk & Wardwell Beijing corporate partner.

"The big state-owned enterprises are heavily influenced by national economic policies, so they may have had capital raising and acquisition plans, but they have been waiting for the changeover to take place and see whether there will be any drastic changes to fundamental policies."

David Eich, founding partner of Kirkland & Ellis' Hong Kong office, also cited uncertainty ahead of the changes: "While the role of government in Chinese transactional activity remains very important, it's been more about the transition itself than the particular group or policy. 

"Like the US elections, the change in leadership consumes a lot of energy and creates uncertainty in business, and that tends to encumber transactional activity."

On the policy side, lawyers believe another key long-term impact on the profession could be an overhaul of the judicial system in March, which is set to see the appointment of a new president of the Supreme People's Court.

According to media reports, the country is preparing to appoint its first lawyer – Hunan party chief Zhou Qiang – to head the court, a move which could lead to more lawyers moving into senior positions within China's legal system.

"What will matter more to the legal market will be a change in the chief judge of the Supreme Court," said Rae Yan, an intellectual property partner at Hogan Lovells in Beijing.

"In my opinion, this change will have a bigger impact than the change in leadership of the country. In the past few years, judgments have been quite political. The expected new chief judge understands more about law. So hopefully, that will [create] a good trend."

The new members of the Politburo Standing Committee – China's supreme government body – were also revealed this month, with Li Keqiang succeeding Wen Jiabao as premier. The committee, which will lead China for the next decade, was reduced from nine to seven members, with most viewed as being politically conservative.

According to Citigroup economists, the change in leadership represents a move towards business and stability. Among the new members of the committee, six have previously been employed in coastal areas as provincial governors or party heads, while four worked in the countryside during Mao Zedong's reign, hinting at a pro-enterprise approach.