| While the fifth wave of transnational M&A sweeping over the world, China is inevitably encountered with the M&A by foreign investors (hereinafter referred to as FIMA). On one hand, we cannot ignore the role played by FIMA in pushing forward the development China's economy. On the other hand, great importance should be attached to its side effects, especially the losses of state assets caused by FIMA. Starting from issues concerning the losses of state assets caused by FIMA, the defects and insufficiencies in current legal framework was analyzed. Related legal countermeasures were given from perspective of the ascertainment of property owner, perfection of the system on the evaluation of state assets, curbing of the infringement acts upon assets by foreign investors after acquiring control over enterprise(s) by virtue of loopholes in related legal system, and special protection for the intangible assets.Chapter 1 deals with the issue concerning who should act as the seller of state assets to decide the transaction conditions and to be responsible for the acts and consequences of the transaction, thus ensuring proper administration over the sales revenue of state assets. The discussion on this issue is closely related to the reform of current system on the administration over state assets. The defects in the newly enacted Regulations on Administration and Supervision over State Assets in Enterprises were analyzed. A new type of State Asset Administration System (hereinafter called SAAS) should be established by borrowing successful foreign experiences in SAAS. The nature and functions of organs in SAAS at different levels should be defined clearly by legislation. The seller of the state assets may be more accurately defined according to different industries with which the objective SOEs in FIMA are affiliated.Chapter 2 discusses the issues results in the losses to state assets during the process of FIMA. The causes for the losses and the defects in the system on the evaluation of state assets were analyzed. The countermeasures for the perfection of current evaluation system were given from the perspective of enactment of related system, perfection of the evaluation methods, improvement the quality of the evaluation institute and its personnel, and the enhancement of the supervision and administration, etc.Chapter 3 analyzes two loopholes in the legislation involving foreign interests by virtue of which foreign investors infringe upon the rights and interests of state assets after they have acquired the control over the objective enterprise, thus causing losses to state assets. Section 1 analyzes the system of "claimed registered capital" in the legislation concerning foreign investment that leads to the losses to the state assets. According to the ineffective enforcement of the system of "claimed registered capital", countermeasures were given of the revealing of actually paid capitals, the agreed clauses on the guarantee of investment, restrictions over the decision-making powers by foreign investors with inadequate agreed investment. Section 2 is about the taxation loopholes in legislation, namely the lack of regulations on anti-tax evasion, especially on the pricing transfer, which results in the excessive transfer of due profits of Chinese partners and the illegal evasion of tax liability. According to the status quo, the author proposed systematic countermeasures, including the abolishment of the preferential treatment, the enactment of the exclusive regulations on anti-pricing transfer, the implementation of the system of booking pricing.Chapter 4 expounds the issues of intangible state assets, which cause enormous losses in FIMA but are commonly ignored. Causes for the losses of intangible state assets were analyzed. The author held that to minimize the losses to the intangible state assets, a complete legal framework for protection is badly needed, including the enhancement and perfection of exclusive legislation on the protection of intangible assets, the enactment of r...
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