For multinational companies entering China, some of the most difficult legal and regulatory risks are not always hidden in the fine print of a regulation. Sometimes, they stem from something far more familiar: an approach that has worked perfectly well everywhere else.
Cathy Chen has seen this play out repeatedly.
Across a career spanning private practice and in-house roles, Cathy has advised on cross-border transactions, financial regulation, data governance and fintech matters. Today, as a partner at Zhong Lun Law Firm, she helps multinational and domestic clients navigate China’s regulatory landscape. Cathy has found that a global playbook does not always work as neatly in China.
“The biggest risks rarely come from the text of the law itself,” Cathy says. “They come from applying overseas assumptions about how regulation works to a very different regulatory environment.”
The point becomes clear in practice.
Beyond the Written Rules
Cathy has seen situations where regulatory requirements in different jurisdictions pull organisations in opposite directions. One multinational financial services group found that its global sanctions framework created challenges for certain transactions in China, leading it to develop separate approaches for domestic and cross-border activities.
In another example, an international payments company planned to roll out a global customer analytics programme that pooled transaction data from different markets into a central data warehouse. While the model had been designed around international data protection standards and was already in use elsewhere, local requirements meant the approach could not simply be replicated in China. The company eventually adopted a separate framework for the market and introduced local regulatory reviews for future global projects.
Even relatively routine business arrangements can present unexpected challenges. A U.S. technology company applying its standard approach to fees charged to its Chinese subsidiary found that local authorities required significantly more supporting documentation before payments could be made overseas.
While the circumstances varied, Cathy sees a common thread.
Looking for the “Unknown Unknowns”
It is this perspective that Cathy brings to Season 2 of the Singapore Academy of Law’s Regional Counsel podcast, which focuses on China and the practical issues in-house counsel should be thinking about when operating in the market.
What drew her to the podcast was its focus on what legal teams may not know to look out for in the first place.
“What stood out to me about Regional Counsel is that it delivers practical, jurisdiction-specific insights for in-house counsel, rather than generic legal theory, especially its focus on ‘unknown unknowns’, which is exactly where most cross-border risks lie.”
Cathy’s experience across private practice and in-house roles has given her a unique perspective on cross-border legal and regulatory challenges, allowing her to see issues through both global and local lenses.
From the Local Reality Up
Cathy’s examples span very different areas, from financial data and licensing to sanctions and foreign exchange controls.
Yet they all point to the same underlying lesson.
For in-house counsel, the lesson is not to abandon global consistency. Common policies and systems remain important, particularly for organisations managing risk across multiple markets. The task is to build in room for local judgment.
Real-world experiences often illuminate practical considerations that may never be apparent from reading legislation alone. Just as importantly, they help lawyers identify questions they may not otherwise have thought to ask.
This is where Cathy hopes the second season of Regional Counsel can help in-house counsel see beyond the familiar.
As Cathy puts it, “The most reliable strategies are always built from the local regulatory reality up, not from a global template down.”