Chinese Enterprises In The Implementation Of National Security Review Of Mergers And Acquisitions Risk And Its Prevention

In recent years, the foreign direct investments of Chinese enterprises haveincreased significantly. Chinese companies have become an important part ofinternational investment market. The proportion of transnational M&A in theseinvestments is dramatically increasing, so it has become the most important form ofoverseas investment. The transnational M&A from China not only provides hugedevelopment fund for host countries, but also promotes economic cooperationbetween China and other countries and enhances China’s strength to participate inglobal economic governance.China has been an important role on the stage of globalM&A.But at the same time, especially from2006to2009, China’s M&A in the UnitedStates is far behind that of Europe, Japan and other developed countries. One of themain reasons is the pressure of the United States national security review. Ever sinceU.S. lawmakers killed the$18.5billion Unocal deal by China National Offshore OilCorp in2005on the grounds that it could damage U.S. National security, a series ofplanned acquisitions by Chinese enterprises, especially by the state-owned ones, havebeen suspended because of fear to be blocked.This paper tries to sum up the features of U.S. national security review systemand to explore the focus of national security review, by conducting an intensive studyof the system from substantive and procedure rules. In the end, the thesis offers somesuggestions to Chinese government and enterprises, in order to effectively guardagainst review risk.