The Regulation Of M&A By Foreign Investors In China

With the globalization of the world economy and the rapid development of China’sforeign trade, China has become the world’s most attractive country to foreign investors.M&A by Foreign Investors as a major form of foreign investment in China, not onlybring international advanced technology and management experience, but also hasplayed a positive role in the field of take the advantage of economies of scale, improvethe international competitiveness of enterprises, and expand international market share,enhance the country’s economic strength, etc. At the same time, we should also be notedthat there are many problems and risks in the process of M&A by foreign companies,and it has brought some negative impact on China’s economic security as well as thehealthy growth of the national industry. Therefore, it has important practicalsignificance to analyze the legal issues in M&A by Foreign Investors, and then toexplore the improvement countermeasures on the system of foreign M&A in China. Theresearch object of this paper is the legal regulation of foreign acquisitions in China, andthe article analysis of existing problems by sort out the relevant system of legalregulation. Then it combined with the China’s national conditions, to study how toestablishment a legal regulation system which is scientific, reasonable and effective. Inthe last, this article provides the recommendations on how to improve and supplementthe existing legal regulation system. The author also expects to play the role of how toestablish a sound and effective regulatory system of our country. The article is dividedinto four chapters; the main contents are as follows:The first chapter is reviewed on the theory and practice of foreign M&A in China.First to sort out the basic concepts and involving basic theory of foreign M&A, focuseson the theory of cross-border M&A, control of market theory and theory of governmentregulation. Further investigate on the current situation and development trend of foreignM&A. The second chapter focuses on the risk and necessity of foreign M&A in China,preliminary theoretical framework of the risk in M&A. The risks summarized as systemrisk, industry risk and financial risk. These risks may result in increase concentration ofChina’s market, arise the phenomenon of monopoly, also impact the stability of China’sfinancial market, and ultimately are not conducive to the development of China’spolitical, economic, cultural industries. Although foreign in China has not been enoughfor pose a threat, but some of the potential risks caused by the Chinese governmentattaches great importance. Although foreign M&A hasn’t to pose a threat yet, but somepotential risks should caused our government’s great importance.The third chapter is discussed the status of risk regulation. First analysis theexisting legal system, including laws and regulations and specific system of regulationof foreign M&A. Followed by evaluation of the current situation, elaborate deficienciesof the law regulating system, such as: the legal system and approval system is still notenough imperfect, the level of current legislation is low, the foreign mergers andacquisitions regulatory legislation are also inadequate.The last chapter put forward a sound proposal of the system of legal regulation.This part put forward my own little plain view and I hope to make some contribution forthe legal regulation of foreign M&A in China. Specific recommendations are departurefrom China’s actual situation, develop industry-oriented policies of operable foreignM&A in China, build a systematic legislation system, and establish an effective M&Alegal regulation of foreign investment in China.