CHINA Law and Practice Contributed by: Liu Cheng, Li Yumeng, Ye Hongtao and Jiang Hanxue, King & Wood
capability, incentive and possibility to eliminate or restrict competition; and • co-ordinated effects, ie, if the relevant market is characterised as oligopolistic (it has a limited number of competitors), the SAMR may focus on whether the concentration would generate or rein - force multiple undertakings’ capability, incentive and possibility to eliminate or restrict competition For concentration between undertakings active at dif - ferent levels of the supply chain, the SAMR will typi - cally consider the following competition concerns: • unilateral effects, primarily foreclosure effect, ie, whether the concentration would cause input foreclosure or customer foreclosure, and also the elimination or restriction of competition through access to competitively sensitive information; • co-ordinated effects, ie, whether the competition structure would be altered, increasing the possibil - ity to eliminate or restrict competition in a collective way; and • in certain sectors, the SAMR may also consider whether a vertical integration would increase the undertakings’ ability and incentives in self-prefer - encing. Conglomerate Concerns If there are neither horizontal nor vertical mergers, the SAMR will apply the conglomerate theories of harm. To address the conglomerate effect, the SAMR will typically consider the following competition concerns: • unilateral effects, ie, whether the concentration in a collective way. Vertical Concerns would give rise to the limiting or foreclosing of competition through tying or bundling strategies; • co-ordinated effects, ie, whether the concentration could facilitate collusive outcomes by reducing the number of effective competitors; and • in certain sectors, the SAMR may also consider whether a conglomerate integration would promote the development and expansion of the ecosystem, increase product portfolios, foster economies of scope and network effects, or enhance user sticki - ness, and thereby assess whether the undertaking
operating the ecosystem has the ability and incen - tives to eliminate or restrict competition. The Horizontal Merger Review Guidelines and the Non-Horizontal Merger Review Guidelines provide the market share and HHI thresholds for the assessment of anti-competitive effects. For details regarding the market share and HHI thresholds, see 4.1 Substan- tive Test and 4.2 Markets Affected by a Transaction . 4.5 Economic Efficiencies Economic efficiency is one of the factors that the the SAMR considers when assessing the impact of the concentration. Article 34 of the AML provides that the SAMR may approve a concentration with anti- competitive effects if the parties prove that the con - centration will generate pro-competitive efficiencies that significantly outweigh its anti-competitive effects. In general, economic efficiencies must (i) benefit con - sumers; (ii) be merger-specific; and (iii) be verifiable. The notifying parties must provide relevant informa - tion and evidence on the possible efficiencies that can be achieved, the time required, quantification, the level of the resulting benefit to consumers, and whether such efficiencies can be achieved without the concentration. As of late June 2026, there are no precedents regard - ing how the SAMR assesses or gives weight to eco - nomic efficiencies. 4.6 Non-Competition Issues During the merger review, the SAMR will mainly con - sider whether the transaction would have substantial competition concerns. Nevertheless, merger control reviews can also extend to non-competition factors such as national security, industrial policy, etc. As provided by Article 8 of the AML, the state must protect the legitimate operation of undertakings engaged in the industries that are vital to the national economy and national security where mainly state- owned enterprises are active. In addition, as provid - ed by Article 37 of the Provisions on Concentration Review, factors such as public interest and whether the merging parties are failing companies will also be
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