Legal Concern About Foreign Acquisition And National Economic Security

With its accession to the World Trade Organization (WTO), China has entered a new stage, the pace of economic development getting faster and faster. At the same time, the pace of foreign investor is also getting faster and faster, so there is growing concern about national economic security. In recent years, multinational corporations on mergers and acquisitions of state-owned large and medium enterprises, the intention was not entirely commercial in nature, and has obvious strategic point to control the Chinese market. The process of foreign acquisition is so smooth, and threats our economic security seriously, the reason is that China is currently in the process of rapid economic development, and related laws and regulations are not sound, so we give to the"foreign investment"opportunity.Foreign acquisition is a double-edged sword, you want to bring a better use of its funds and advanced management system, but also protect our economic security, no doubt, and the key is that to build a sound legal system in China's foreign acquisitions.This thesis mainly consists of four parts.In the first part, I mainly study the definition of foreign acquisition and national economic security and their relationships. Firstly, define the meaning of foreign mergers and acquisitions. Foreign acquisition refers to the foreign investors to buy shares of domestic enterprises or assets of a legal act. Secondly, analyze the relationships between foreign acquisition and the national economic security. Foreign acquisition impact on national economic security needs of dialectical analysis. On the one hand, as developing countries, economic is backward, institution is inadequate and financial system is fragile, the process of mergers and acquisitions in foreign countries to control and vulnerable to the impact of foreign capital, which is negative for a country's economic security; On the other hand, foreign acquisition is good to promote efficient use of resources and rational allocation, so as to promote the economic development of developing countries, and economic development itself is the best security infrastructure. All in all, a country to protect the national industry of security, to prevent foreign control of national economy and national markets, needed to strengthen supervision of foreign capital, but worry that too strict regulation of foreign capital will not come in, influence of capital, technology and the introduction of advanced management methods, influence to improve their international competitiveness, and thus also affect the country's economic security. This is a country's legislation on proposed acquisition by foreign investors demand higher, through well-developed, moderate laws to protect the country's economic security.In the second part, I mainly study the underlying forces and status quo of foreign acquisition in our country. In order to develop sound and effective laws to regulate foreign acquisition depends on foreign acquisition and the current situation of China's foreign investment acquisition analysis, to found the problems. Firstly, the underlying forces of foreign acquisition. Chinese government encourages foreign acquisition of state-owned enterprises, the main motivation is the acquisition by foreign investors can reduce the financial burden; foreign mergers and acquisitions can enhance the vitality of state-owned enterprises, increase government revenue; foreign acquisition helps to reduce duplication and optimize the industrial structure. Acquisition motivation of our enterprises is mainly because China's policy environment improved, by way of mergers and acquisitions, to achieve the purpose of entering the market quickly, saving time and costs. Secondly, the status quo of foreign acquisition in our country .Currently, foreign acquisitions of target companies choose more concentrated in the economically developed Yangtze River Delta and Pearl River Delta region, while the Northeast and West and other less developed areas of the listed companies in foreign acquisitions has lagged behind. The goal of acquisition industry is mainly concentrated in manufacturing, real estate and finance industry. Thirdly, introduce the existing problems of foreign acquisitions. In China, for foreign mergers and acquisitions on the impact of China's economic security, the different attitudes exist, some people were cautious, and some people were optimistic. It can be said, for the moment, a foreign-funded enterprises is difficult to form a monopoly of an industry in China in the short term, it is also difficult to threaten China's economic security. However, we discuss the country's economic security, not only for the present, but vigilant in peace, and there are many problems of foreign acquisition in our country, plus there are potential dangers. Problems in China's foreign investment acquisition are the legislative deficiencies firstly. Foreign acquisition legislation is a system, but our legislation in the absence of a sound regulatory system. Basically follow the existing legislation, the guiding ideology is"a development of a mature"or"stop-gap measures,".Showing a lack of planning legislation for foreign mergers and acquisitions and transcendence. There is disharmony between the laws, even contradictory phenomenon appears. Secondly, multinational enterprises, especially the leading acquisition enterprise in China, the gradual evolvement as a trend, and related to the deviations that many local governments how to use foreign ideas (the typical case is the acquisition of EXCELLNANFU Battery Case). Thirdly, in cross-border mergers and acquisitions market, despite the multiple regulation is an obstacle; appropriate, such as access to the full support of the Government, foreign acquisition always goes well, therefore, resulted in individual cases, lack of transparency in foreign acquisition process, and lack of supervision of the situation (typical case is Strategic Holdings phenomenon).In the third part, I introduce the characteristics of the U.S. acquisition legislation and its national security system and legislation on the protection of national economic security legislation in some other countries legislation can not be separated on the practice of mergers and acquisitions. Improvement of the foreign acquisition legislation to safeguard national economic security can learn from the successful experience of foreign countries. First, the United States is the world's most developed countries, but also the most active country where mergers and acquisitions happen. Basically, the U.S. government encourages foreign investors to U.S. investment with fully open policy, and gives them national treatment; therefore, the United States is single-track legislative model. Even developed countries such as the United States, the country's economic security are also in need of protection. Firstly The U.S. provides a national security review system, the acquisition between Lenovo and IBM, people are all familiar with, is adopted the review of this system, each procedure has its legal basis, we can learn from the U.S. national security review system, only if the national security review rise to the level of the law, we can give smooth to the parties, full of expression, and allow different groups to national security evaluation under the guidance of the legal system. Secondly, although Japan is economically developed countries, but Japanese maintain a high level of vigilance for foreign acquisition, protect their vulnerable industries with legal methods of the industry classification and protection practices, we should learn from. Thirdly, Australia is a newcomer in the developed countries. Unlike other developed countries, they encourage foreign investment, as well as prevent foreign infiltration, The Australian Government set up a special central agency (Foreign Investment Review Board) which is responsible for the management and review of foreign investment. China should pay attention to build the authoritative department to prevent duplication, to minimize the examination and improve efficiency; however, foreign investors are terrified that is bad to attracting investment. Finally, Thailand is actively introduce foreign investment among developing countries, their situation will be according to their own country is divided into three regions respectively, and use the various preferential policies to foreign investors, which is of significant strategic meanings in the implementation of western development. It is a good reference.The fourth part is several thoughts on foreign acquisition and national economic security. Through the previous analysis and consideration, in order to expand opening up, as well as maintain economic security, we should improve our legal system. First of all, we should provide national economic security system to safeguard the economic security institutionalization, administrate according to the law. Secondly, we should establish"Foreign Investment Law", in order to regulate foreign investors in China better. Thirdly, we can draw on the experience of other countries, improve our foreign policy. Finally, the government plays an important role in the process of M&A, we should understand the role of government comprehensively, regulate the functions of government.All in all, foreign acquisitions not only bring capital, technology but also bring competition and monopoly. To deal with this"double-edged sword"needed to establish and improve the situation of foreign mergers and acquisitions accord with our legal system, only by doing so can we make our country in the context of economic globalization, invincible. The process to improve the system is long and complex, the consideration of foreign acquisition and national economic security will continue.