China's merger control regime in the face of global Integration: features and implications
| Autor | Hao Qian |
| Cargo | Associate Professor, China University of Political Science and Law. Research related to this article is funded by a grant from the Scientific Research Foundation for the Returned Overseas Chinese Scholars, Ministry of Education of China. The views expressed here are solely the author's and should not be attributed to any other person or entity |
| Páginas | 137-160 |
doi: 10.5102/prismas.v7i2.1283
China’s merger control regime in the face of
global Integration: features and implications
Hao Qian1
Abstract
Since China’s merger control regime under the Anti-Monopoly Law (AML)
was established in 2008, the enforcement record has given rise to growing con-
cern that the system is inherently biased against foreign multinationals. is article
conducts an analysis of the evolution of China’s merger review system to assess
this charge and its implications. China’s steady economic development fueled by
foreign investment has led to a domestic market featuring strong foreign presence.
Foreign-domestic competition gured as an important issue for the policymakers,
especially in anticipation of China’s entry into the WTO. is concern precipitated
the establishment in 2003 of the country’s rst merger review system, which only
applied to M&As by and between foreign companies. Although the AML on its
face applies generally to both foreign and Chinese rms, enforcement authorities
have only intervened in foreign takeovers. China’s merger control regime is die-
rent from that of mature market economies and has signicant implications for
itself as well as foreign investors.
Keywords: China. Merger control. Global integration. Foreign-domestic competition
1 Introduction
Since China began to implement the Reform and Opening-Up Policy in
1978, it has engaged in an unprecedented undertaking of overhauling its legal sys-
tem in order to facilitate and adapt to its stellar economic growth. Of the large
1 Associate Professor, China University of Political Science and Law. Research related to
this article is funded by a grant from the Scientic Research Foundation for the Returned
Overseas Chinese Scholars, Ministry of Education of China. e views expressed here are
solely the author’s and should not be attributed to any other person or entity.
138 | Prismas: Dir., Pol. Publ. e Mundial., Brasília, v. 7, n. 2, p. 137-160, jul./dez. 2010
Hao Qian
number of changes and developments that have taken place in this area, the merger
review system is a rather recent addition to China’s legal infrastructure. In 2003 the
Provisional Regulations on Mergers with and Acquisitions of Domestic Enterprises by
Foreign Investors (“Provisional M&A Regulations”) was adopted, containing in it a
nascent antitrust mechanism to regulate only those M&As by and between foreign
investors.2 It was not until the Anti-Monopoly Law (“AML”)3 entered into force in
August 2008, that China introduced a fully-edged merger control regime that
applies generally to both foreign and Chinese companies4.
From the beginning of its brief existence under the AML, however, China’s
merger review regime has been subject to close scrutiny and extensive debate. To a
large extent this reects the enormous interest in the AML generally, which, aer
13 strenuous years of eorts to dra, is hailed as a signicant landmark in China’s
gradual transition from central planning to a market economy. Merger review, to-
gether with provisions prohibiting cartels and abuse of dominant market position,
constitute the three basic “pillars” of the AML. But more importantly, wide-spread
public attention has been caused because authorities have taken an activist appro-
ach to merger enforcement that seemingly target foreign investors in particular.
During two years aer the merger review system was established under the AML,
the enforcement agency approved six mergers subject to restrictive conditions and
blocked one merger, all of which involved foreign multinational companies.
In developed market economies such as the U.S., antitrust regimes inclu-
ding merger review systems were established to address competition issues in a
market composed almost exclusively of domestic rms. In contrast, under the bro-
2 ARTICLES 19-22. M&A Regulations. Available at:
177/2006/1/wa333914728211600220049-0.htm>. Access on: 17 Aug. 2010.
3 CHINA. Ministry of Commerce of the People´s Republic of China. Anti-monopoly
Bureau. e anti-monopoly law of the people’s Republic of China, adopted by the 29th
Session of the Standing Committee of the Tenth National People’s Congress on 30 Aug.
2007, and promulgated by Presidential Order No. 68. Available at: .gov.cn/
ziliao/fg/2007-08/30/content_732591.htm>. Access on: 17 Aug. 2010.
4 Se e Chapter VI of AML, which is entitled “control of concentrations”. For the purpose of
the discussion in this article, “merger control” is used interchangeably with “control of
concentrations”.
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