Yes, but foreign law firms practicing there are now facing problems:
"Mainland legal groups are urging the government to crackdown on foreign law firms that exceed their legal operating authority by practicing Chinese law, which could lead to the sanctioning and closing of some foreign law offices, or even the voiding of business and legal transactions, a legal expert told Interfax.
"A memorandum published by the Shanghai Bar Association accuses foreign law firms of engaging in illegal activities that constitute ‘severe’ threats to ‘the justice and economic safety of China’ such as providing Chinese legal services, hiring Chinese lawyers and tax evasion.
"’My understanding is that it’s bad enough that some [foreign law] firms could be shut down,’ Steve Dickinson, a lawyer with Harris & Moure, who made the memorandum public on his website, China Law Blog, said.
"The most worrisome allegation made in the memorandum is foreign firms hiring Chinese-licensed lawyers and using legal assistants to provide legal services, such as drafting and interpreting contracts, project investigation, or providing interpretations and opinions of Chinese laws.
"Many legal documents, such as opinions on how Chinese law applies to a transaction, can only be rendered by a Chinese attorney, which foreign law firms are prohibited from employing."
Follow up from China Law Blog: "[H]ere is the link to our original blog post on this issue. This post links to the original Shanghai Bar Association memo, in Chinese, and to the English language translation." http://www.chinalawblog.com/chinalawblog/2006/05/chinas_foreign_.html