The Status Quo Of China's Foreign M & A Legislation, Questions And Suggestions

Since late 1980's, Transnational Merger and Acquisition (M&A) has become a world trend and the major Foreign Direct Investment (FDI) means of transnational corporation. With the era of global economy, knowledge economy and information technology's coming, opening levels of market in every country are being upgraded continuously, competition among transnational corporations are being intensified continuously, thus the market of China, which is big and has great potentialities, has been and will continue to be the focus of transnational corporation.At the end of 1990s, China government has paid attention to the gigantic cross-border M&A wave in the world and adjusted the policies of attracting foreign capital gradually. Especially after China's entry to WTO, the relative laws and regulations are carried out faster than before, which clear away the barriers for foreign capital to tip into China's market. As to the industries that foreign capital M&A can come into, most of them has realized being opened to the outside world basically; As to the object of foreign capital M&A, the state-owned cooperation and listing companies has got the permission to attract foreign capital. The "Provisional Regulation about Foreign Investors' Merger and Acquisition of Cross-border Companies" implemented from April 12th, 2003, allows foreign capital to interfere into nearly all kinds of enterprises and gives definite answers to the auditing and approving process of foreign capital M&A which once bothered many foreign businessmen.However, compared to the rapid development of foreign capital M&A, China's legal system of this field still has many defaults. Firstly, the laws of foreign capital M&A exist contradiction; secondly, the government has interfered the action of foreign capital M&A in detail more than she should; finally, the government has less regulation on foreign capital M&A macroscopically. Based on the analysis of the defaults of existing foreign capital M&A legal system and referred to the study of cross-border M&A of some countries, the author gives suggestion to improve the existing foreign capital M&A legal system in China.