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Legal risks for foreign investors in China shale opening

The government is keen to lure foreign investors into the country’s unconventional gas sector. Hopeful developers must be clear about the rules, write Fung Lin Leung, senior associate, and Ben Smith, foreign legal consultant, Norton Rose Fulbright Hong Kong

China has lots of shale gas and its government is keen to see foreign investors help produce it. But before it can repeat some of the success of North America’s unconventional sector, China has much to address, including the regulatory regime for foreign participation, subsidies, access to pipelines, and water usage and protection.There’s no doubting the government’s enthusiasm. China has carried out two tendering rounds for shale gas exploration rights since 2011 and a third round expected this year. New policies have been introduced since 2011 to spur investment in shale gas, including a number of significant moves, such as the Ministry of Land and Resources’s (Molar) reclassification of t

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