The Merger Control Legislation In China

M&A, known as merger and acquisition, is a quite common phenomenon in economic activities. M&A does have two features, one of which is in favor of establishing scales of economy, with a result of increasing the operators'competitiveness; the other of which is not in favor of maintaining market competition by creating or enhancing domination of markets.It is a tendency that monopoly will be formed or encouraged because of unlimited M&A over existing enterprises which would eliminate competitors. Due to safeguarding market competition, anti-trust acts of various countries'has imposed necessary control upon M&A among enterprises, in order to protect over-concentration of economic forces, which would lead market domination or negative impact on market competition.The relevant laws are mainly focused on application and approval system on enterprises M&A, which means that any M&A, on and above a certain amount, shall submit an application to an anti-trust administration agency. According to the relevant laws of the U.S., European Union, Germany, Japan, any M&A, which would lead"actual deduction of competition or formation of monopoly", and/or"creating or enhancing market domination position", the anti-trust administration agency will have authority to prohibit such a M&A.Since long, there has been inadequate regulation and supervision on M&A in China, with a result of obvious monopoly in some industries in China. In recent years, it has been an irresistible tendency that foreign enterprises are conducting M&A over Chinese enterprises. Those M&A made by foreign enterprises will be harmful to national economic security of China unless laws and regulations regarding to M&A are to be promulgated as soon as possible.This article will offer some constructive suggestions on control system on M&A, by studying concept of M&A, relationship between M&A and monopoly, legislative commonness of M&A control, and legislative practices of some developed countries', such as the U.S., European Union, Germany, as well as the"Anti-Monopoly Act"(draft) of China.