Study On Legal Issues For Chinese Enterprises Concerning M&A Overseas

A mounting influx of foreign funds into Chinese capital market is attributable to China's persistent process of opening up to the outside world. Meanwhile, overseas M&A by Chinese enterprises has also caught much attention. The drastic inflow of foreign capital into Chinese market undeniably exerted huge impact on China's domestic industry for the time being. Therefore, the enactment of "Provisions for Foreign Investors to Merge Domestic Enterprises" serves as an appropriate response to such impact.The fifth wave of cross-border M&A at late 1990s and early 2000s is marked by a trend towards globalization. Unprecedentedly, some enterprises in the developing countries are taking part in the M&A, which was traditionally headed by the top players in the United States, United Kingdom and some other countries in the developed world. In this fifth wave of M&A, the developing world begins to adopt the so-called "reverse M&A" by aiming at enterprises in the developed world and even shifted from acquiring traditional industries towards high-tech and highly value-added domains, which testifies the fact that it is possible for enterprises in the developing countries to initiate M&A in overseas countries as long as they are well funded and equipped with high caliber management skills and expertise. As a matter of fact, Chinese enterprises have been initiating acquisitions overseas in a large scale, however, many of them ended up in failure attributable to political, economic and quite some other influences and a case in point was the failure in the proposed acquisition of Burg Group by China International Marine Containers (Group) Co., Ltd.Cross-boarder M&A is similar to green land investment, but it has many of its own advantages. The author believes that cross-boarder M&A shall be treated objectively as a strategy in pursuing target markets and cooperating with others on a global basis.With an eye towards winning their own turf in the world market, Chinese entrepreneurs must act more open and actively. Apart from industry choice, government lobbying andUnderstanding of foreign laws, the author maintains that the key issue currently is to promulgate relevant laws and regulations in respect of Chinese entrepreneurs' overseas M&A, as counterpart to "Provisions for Foreign Investors to Merge Domestic Enterprises".