Regulation On Foreign-capital M&A Under Antitrust Law

The tidal wave 01 foreign-capital M&A to domestic enterprises has brought new opportunities to China's economic development, which also inevitably led to a monopoly. The Foreign investment in some industries has essentially controlled the majority of market share, and by virtue of their dominant position of monopoly, they raise prices to obtain high profits, or suppress the competitors by low-cost dumping, or form technology and market barriers by restricting the unreasonable trading conditions. The action of abusing of dominant position has directly aggrieve the interests of the consumers and the public, which has caused a serious obstacle to the survival and the development of domestic enterprises, and caused the damage to our country' s economic security and social benefits.Chapter Two illustrates the theoretical framework on the Antitrust Law legislation of the foreign-capital M&A. The thesis first argues the necessity for foreign capital M&A under Antitrust Law from the perspective of Economics of Law and Sociology of Law and then concludes with the value orientation and basic principles of the legislation. Monopoly is inevitable in the market economy due to the survival of the fittest incurred by competition, scale economy, technological advantage, information advantage, products differentiation, private property rights and other exclusive property rights, etc. The benefits or losses resulted in by monopoly or competition are required to positioned in the Antitrust Law so as to get the optimal or comparatively excellent results by means of legislation. The microeconomic body with the pursuit of benefit maximization allocates the resources in accordance with the signal of market prices. The signal is spontaneous and free and is in essence opposed to the government intervention. The unique innate value embedded in the Law determines its social functions of various aspects, namely, safeguarding the enterprise freedom, maintaining the liberty and equality in economic activities and keeping an equal and co(?)petitive market environment to ensure the efficient market running; efficient competitive system should be protected to realize the optimal resource allocation, to eliminate the barriers in technological progress, to promote the economic efficiency and social welfare; safeguarding the consumers' rights and etc. From a long-term view, our priority value orientation in antitrust lies in the establishment of an equal and competitive system. However, the priority now should be given to protection of our national economic interests. The principles of the legislation consist of the national economic security, the national treatment with some limits, equality and efficiency and etc.Based on the analysis and research on the legislation of the foreign capital M&A under Antitrust Law in the United States, European Union, Germany and Japan, Chapter Three concludes with some points we could borrow for reference, thus laying the foundation for the specific system construction of our foreign capital M&A under Antitrust Law in Chapter Four. According to the system in the United States which consists of a variety of laws and relies upon the coordination of several functional bodies, the single beforehand declaration is applied in enterprise merging to elevate the supervision of the merging in cross direction. The legal procedures in the European Union M&A laws gives full play to the bulletin function in the Procedure Law to lead the public to participate in the M&A. The Act against Restraints on Competition and Law on Foreign Capital of Germany exercise restriction on the merged and acquired industries, such as the fully limited industry under state monopoly and other industries with the ordinary limitation. In addition, the Laws impose strict censoring on the foreign capital access M&A. Japan attaches the importance to the censoring of the industry merging above the scale standard and sets up a model for the structural manipulation. The small and medium-sized enterprises (SMEs) are given special legal protection, which is of reference significance for us.The last chapter first constructs the legal system on the foreign capital M&A under Antitrust Law and then puts forward the corresponding suggestions on the specific designing of the substance rules, procedure rules and executive rules. The substance rules aim to make some improvement on the systems related to the positioning of the relevant markets, the understanding of the correlative markets, the guideline and exemption of Market Concentration Rate and legal sanctions; the procedure rules try to make progress on the systems related to the establishment of the system of beforehand declaration of foreign capital M&A, afterward supervision and antitrust hearings; the executive rules make some perfections on the extraterritorial effect and the special executive bodies.