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Never mind the domestic business climate. During the second quarter of 2010, China surpassed Japan as the world’s second-largest economy behind the United States with nearly $1.34 trillion in gross domestic product, and firms with a beachhead in the People’s Republic are profiting by that growth.

“The underlying trend of an increasing interaction between China and the rest of the world is good for international firms like us who specialize in doing things like cross-border transactions,” said Rowland Cheng, managing partner of the Shanghai office of Latham & Watkins.

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