Study On The National Security Review Of Foreign Acquisition

Focusing on the National Security Review of Foreign Acquisition ("NSRFA"), this thesis, from the perspective of comparative analysis, analyzes and explores the NSRFA legal system in United States, Canada and Japan. On the other hand, based on China's current laws and regulations on foreign acquisition, this thesis does a research on the absence of NSRFA in China as well as the potential adverse effects, which arise from foreign acquisition, on China's national security. In the end, this thesis proposes some suggestions on the establishment of China's legal system regarding NSRFA. In addition to Preamble and Conclusion, this thesis comprises 4 chapters with more than 40,000 words, the abstracts of which are as follows:Chapter One is mainly dedicated to introduce the NSRFA by detailing the definition and legislation of NSRFA as well as the reasons by which the NSRFA emerges. When explaining the definition of NSRFA, this chapter analyzes the concepts of National Security and National Economic Security and discusses the relations thereof. The author is of the opinion that the NSRFA, as a kind of regulatory measures taken by a country, is in nature the embodiment of exercise of sovereignty, and that the NSRFA comes into existence due to the foreign acquisition's potential adverse effects on the national security of host countries (capital importing countries) and the absence of relevant legislation with regard to NSRFA. In addition, this chapter briefly introduces the regulations of several countries on the NSRFA.Chapter Tow, from the perspective of comparative analysis, roughly discusses the NSRFA legal system in United States, Canada and Japan in three respects, namely, object of review, standard of review and procedures of review. Since the object of review relates to the acquirer, acquiree and acquisition movement, this chapter introduces the different regulations in aforesaid three countries and then makes a comparison thereon. The standard of review, namely, the definition and scope of National Security, is the core of the NSRFA, and this chapter details it by referring to relevant cases in United States. In addition, the procedures of review in aforesaid three countries is also analyzed, which the author hopes could be helpful to improve the China's legal system regarding NSRFA.Chapter Three, standing on China's current legal system, deals with the absence of NSRFA in China and the potential effects, which arise from foreign acquisition, adverse to China's national security. Provisions on Acquisition of Domestic Enterprises by Foreign Investors, which takes effect as of September 8, 2006, proposed the NSRFA in China. Nevertheless, such provisions relating to the NSRFA are obscure, and lack an operational and enforceable framework. When it comes to implementation, China still has to strive for setting up relevant laws and regulations. This chapter also analyzes the foreign acquisition's potential adverse effects on China's national security by quoting three cases, i.e., Sony's Acquisition of Sobey, the proposed Acquisition of Lai Steel by Arcelor-Mittal, and the proposed Acquisition of Xugong Construction Machinery by Carlyle Group.Chapter Four puts forward some suggestions on the establishment of NSRFA in China. Since the NSRFA is different from China's current examination and approval system of foreign acquisition, China shall, in consideration of the compliance of the NSRFA with current foreign investment laws and regulations, establish complete and enforceable NSRFA legal system with reference to the legislation of United States, Canada and Japan. With regard to the proposed NSRFA legal system in China, the object of review, standard of review, organs in charge of review and procedures of review are also elaborated in this chapter.