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“China deals,” says Sullivan & Cromwell partner Chun Wei, “take a lot of patience.” It’s a lesson that was reiterated for Wei last year, in her role as lead lawyer on the $5.65 billion initial public offering of telecommunications company China Unicom Limited. It was the largest IPO in Chinese history. For starters, there was the office problem — or more accurately, the no-office problem. Sullivan & Cromwell had been retained for the offering in April 1999, but the firm was still seven months away from opening its Beijing office. To stake their claim on the Chinese capital, Wei, who had been based in Hong Kong, and four associates had to begin their work on the deal out of temporary quarters at Beijing’s China World Hotel. The team turned a hotel room into a makeshift office and hired temporary secretaries to staff it, going without such staples as high-speed photocopiers and velobinders. (Another partner and two associates also worked on the deal from the Hong Kong office.) Logistics weren’t the only challenge. Before Unicom — which is still approximately 78 percent owned by the Chinese government — could go public, it had to be completely restructured, through the “unwinding” of 40 so-called China-China-Foreign contracts. These arrangements, known as CCFs, were structures under which foreign entities sought to indirectly invest in Chinese telecommunications ventures. (The Chinese government forbids direct investment by foreign companies in the country’s telecommunications industry.) In a typical CCF, a foreign company would establish a joint venture with a Chinese enterprise. That joint venture would then provide financing and technical support to a government-owned company through a project cooperation contract. The Chinese would make periodic cash payments to the foreign investors through the joint venture. In August 1999 — five months into Sullivan & Cromwell’s work on the deal — the Chinese government declared that these arrangements violated the law and ordered all of them to be brought to an end. The attorneys who worked on the IPO were broken into teams so Sullivan & Cromwell could work on unwinding the 40 CCFs at the same time it was preparing the public offering. Wei and her team were dealing with IPO virgins. Unicom’s management had never been involved in this type of international transaction, and that, too, required patience. Unlike American and European managers, raised in capitalist systems, Chinese clients often come to the table understanding very little about what going public will mean for their companies. Therefore, Wei says, they need a lot of personal attention: “It requires memos and walking them through things.” Wei, 41, was born and raised near Shanghai. In the early ’80s she went to New York to attend Columbia Law School on a Ford Foundation grant. After finishing her studies there, she joined Sullivan & Cromwell as an associate, working first in London and then in New York. When Sullivan & Cromwell opened its Hong Kong office in 1993, she transferred there. Says Wei: “I was impressed with the economic reform policies of the Chinese government, and thought that international lawyers might have a role in the process of China opening its door to foreign investment and reforming state-owned enterprises.” Wei made partner at Sullivan & Cromwell in 1997. Wei contends that privatization has served China well. Ever since the first Chinese company went public on a foreign exchange eight years ago, she says, she’s seen positive change in the management of state-owned enterprises as a result of the openness and public scrutiny that come with private ownership. And privatization has received a push in recent years because of China’s desire to enter the World Trade Organization. In 2000 alone, Wei handled IPOs for oil and gas giants PetroChina Company Limited and Sinopec Corp. and Internet service provider Sohu.com Inc. Says Wei: “It’s almost like a revolution.”

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