A Study Of National Security Review System In Sino-U.S. Transnational Mergers And Acquisitions

Transnational Mergers&Acquisitions is the typical commercial activity in theera of economic globalization. However, in order to keep the side effect brought bytransnational M&A in check, many countries established the national securityreview system. In China, this system was also set up with the promulgation of“Provisions of the Ministry of Commerce on the Implementation of the SecurityReview System for Mergers and Acquisitions of Domestic Enterprises by ForeignInvestors” and “Notice of the General Office of State Council on Establishment ofSecurity Review System Pertaining to Mergers and acquisitions of DomesticEnterprises by Foreign Investors” in2011. Recently, many transnational M&A dealsinvolving Chinese enterprises were shut down by the US security review bodies,such as “CNOOC merges Unocal”,“Sany Heavy Industry mergers Oregon StateWind Farm” and so on. Therefore, a comparative analysis should be conducteddeeply toward the US and China’s national security review systems so that Chineseenterprises could take more precautions in transnational M&A activities.As to the methodologies adopted, this paper examines the US and China’snational security review systems with the combination of case study method andprinciples of economics. Basically, the thesis is composed of three parts: the firstpart introduces the background knowledge of the national security system; thesecond part mainly compares China’s review system wih US’; the last part contains the conclusions and suggestions that may be helpful for Chinese enterprises’ M&Apractice in US.There are four chapters making up of this paper and the contents are as follows:The first chapter gives the retrospect of history of national security system andanalyzes some conceptions, which are in relation to the main topic.The second chapter introduces the legal framework and objectives of China’snational security review system and makes comment on it.The third chapter introduces the history and legal framework of US’ nationalsecurity review system and also gives comment on it.The final chapter makes the comparison between the US and China’s nationalsecurity review systems from the perspective of legislation, procedure andconsiderations. Then, the insufficiency of China’s system is analyzed and properlegal suggestions for the Chinese enterprises’ M&A practice in US are put forwardfrom multiple perspectives.