Ashurst has launched a joint operation office in the Shanghai Free Trade Zone (FTZ) with Chinese 'best friend' firm Guantao Law Firm, making it the fourth global player to gain Chinese law capabilities via the four-year-old scheme.

The tie-up, which means Ashurst is now able to offer Chinese law advice to clients for the first time, comes on the back of a longstanding relationship between the two firms.

Guantao, which has 750 lawyers across 13 mainland Chinese offices, has had a non-exclusive referral relationship with Ashurst since 2008. The two firms announced a six-year renewal of a strategic alliance in May last year.

Ashurst managing partner Paul Jenkins said the deal demonstrates the firm's full commitment to further growth in the Greater China region.

"We are seeing an increased flow of work from China," said Jenkins. "Guantao's extensive network [in China] will complement our global coverage in offering a seamless client service, strengthening our market position to capitalise on domestic and international business opportunities," he said.

The joint operation office will also help Ashurst deepen relationships with Chinese clients, said Jenkins. Chinese clients such as China General Nuclear Power Corporation (CGN) – which Ashurst advised on its investment into the UK's Hinkley Point C project – will now be able to engage the joint office on work other than outbound deals with full Chinese law capacity.

The Chinese Ministry of Justice launched the FTZ joint operation programme in 2014, to allow foreign firms to gain Chinese law capability through cooperation with a domestic firm. The programme is one of the few officially endorsed by the Chinese Government. Under Chinese law, foreign firms, which are barred from practising Chinese law, are not allowed to financially merge with domestic firms or hire Chinese lawyers.

In 2015, Baker McKenzie was issued the first such licence when it formed a joint operation office with Beijing-based FenXun Partners. In 2016, Holman Fenwick Willan and Hogan Lovells entered similar arrangements with Chinese shipping firm Wintell & Co and Xiamen-based Fidelity Law Firm respectively.

Beijing-based Guantao is the largest among the four Chinese firms with foreign FTZ alliances.

According to the latest China 40 survey, it took in $68m in revenue in 2016, making it the 14th highest grossing domestic firm. The firm ranked 27th among the 40, with $100,000 in revenue per lawyer the same year and $470,000 in profit per equity partner. It expanded significantly in Shanghai in 2016 by adding 100 lawyers through two mergers with local firms.

In 2017, Guantao managing partner Cui Liguo told The Asian Lawyer that his firm benefited greatly from its alliance with Ashurst as partners were able to closely observe how a leading global law firm managed its operations.

In addition to China, Ashurst also has a formal law alliance in Singapore with local boutique ADTLaw.