On China's Foreign M & A Suspected Monopoly Prior To The Improvement Of The Reporting System,

Transnational M&A has been the leading form of foreign direct investment (hereafter as FDI) since the 1980s. It is predicted that transnational M&A will make a strong impact on China's use of foreign investment necessarily. Foreign capital's M&A can bring host countries advantages such as capital, technology and management skills, while it also brings negative effects such as monopolization which is the worst effect. Therefore, the core of supervision in foreign investment in M&A is monopoly supervision. As other countries in the world, China has set up pre-warning mechanism – the pre-reporting system. However, the current pre-reporting system concerning monopoly in foreign investment in M&A has many deficiencies and it is hard to implement. For example, regarding the core issue of reporting requirements in relation to pre-reporting system of monopoly of international acquisition and mergers, Interim Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors draws on the reporting examination procedures over international mergers and acquisitions of other countries. However, these Regulations are quite too broad in coverage to give a full framework, paying little attention to apply different standards to regions of differing stages of development in terms of different industries and social-economic situations and to impact on reporting examination standards by the industry policies of foreign investment. Thus, the reporting requirements are weak in flexibility and periods, standards and relevancy of related business by which to judge the requirements are quite blurred in terms of definition. In addition, improvements regarding the reporting applicants, the contents of reporting and the government organ in charge can also be made. Therefore, this paper aims to research on the defects and improvements which can be made upon the reporting applicants, reporting requirements, the contents of reporting and the government organ in charge from the point of view of monopoly-related pre-reporting clauses in the Interim Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, drawing from the relevant legislations of other countries. Finally, this paper offers suggestions for relevant legislations in China.