Foreign Capital Merger And Acquisition Activity

Foreign capital merger and acquisition (M&A) activity has become a major means of foreign direct investment (FDI) worldwide. Cross-border M&A activity contributes to the enhancement of international competitiveness, and the lowering of risks of overseas investments. However, its adverse effects are noticeable. Cross-border M&A activity possibly leads to centralization and monopoly of the international production and sale, thus elbowing out national businesses, undermining consumers' interests and national economy of the nation where the target enterprises are located. It has become a world trend to integrate Cross-border M&A activity into the legal system of anti-monopoly in the interested countries. Therefore, it is of great practical and theoretical significance to study the foreign experience in legislation and judicial administration related to the endeavor to help China's anti-monopoly effort.This paper starts with the definition of foreign capital M&A activity, and explains its historical and current situations in China, pointing out the necessity to regulate this activity. Stress is placed on substantial criteria and procedure concerning censoring anti-monopoly regulations imposed on foreign capital M&A activity. After that, analysis is made on problems and solutions concerning the legal system of anti-monopoly in China.Five chapters are included in this paper. Chapter one reviews the foreign capital M&A activity in China, discussing its origin and trend of this activity. In view of the new characteristics that have exerted dual influence on Chinese economy, this chapter also deals with the necessity and legal basis of anti-monopoly regulation of foreign capital M&A activity. Chapter two is devoted to the rules that judge illegal monopoly in foreign capital M&A activity: Per se illegal rule and Rule of reason. The third chapter begins with the introduction of legislation and theories of such developed countries as America and Germany, and then elaborates on the substantial criteria for examining illegal monopoly, and evaluates the related new regulations in China. This is the focus of this paper, with detailed explanation of domination of the market and its judging criteria, its relationship to monopoly, related markets, market shares, exemption of monopoly, and so on. Chapter four, based on the anti-monopoly law in China, introduces procedural entries about the anti-monopoly regulation imposed on foreign capital M&A activity, including report, examination, judicature, execution, etc. chapter five analyses the defects found in the current laws in China, and put forwards proposals to improve our anti-monopoly legal system, including efforts to formulate as soon as possible Anti-monopoly Law and the rules for implementing the law, and make and improve laws related to foreign capital M&A activity; to establish anti-monopoly legal system, with Anti-monopoly Law and the rules for implementation as the core; to modify and improve Law for Countering Unfair Competition; to formulate specially Law for Corporate Mergers and Acquisitions.