CHINA Law and Practice Contributed by: Liu Cheng, Li Yumeng, Ye Hongtao and Jiang Hanxue, King & Wood
2.4 Definition of “Control” Pursuant to the Provisions on Concentration Review, the concept of “control” in a concentration includes both “sole control” and “joint control”. The SAMR will take into account the following factors when determining whether an undertaking acquires control over another undertaking: • transaction purpose and future plans; • change of shareholding structure; • matters put to vote, voting mechanism, historical attendance rates and the votes in the shareholders’ meetings or any other authority; • composition, voting mechanism, historical attend - ance rates and the votes of the board and other decision-making or management bodies; • the appointment and dismissal of other senior management; • the relationship between the shareholders and board directors; and • the existence of major business relationships and co-operation agreements. The acquisition of minor interests less than control can still be caught based on the acquiring party’s right to appoint directors or senior management, veto rights against major business decisions, or control over key resources. 2.5 Jurisdictional Thresholds The current jurisdictional thresholds of merger control in China are only based on turnover, as follows: • the combined worldwide turnover of all the under - takings concerned in the preceding financial year was more than CNY12 billion (approximately USD1.68 billion based on the exchange rate as the average central parity of exchange rates released by the China Foreign Exchange Trade System in 2025, ie, USD/CNY is 1:7.1429), and the nation - wide turnover within China of each of at least two of the undertakings concerned in the preced - ing financial year was more than CNY800 million (approximately USD112 million); or • the combined nationwide turnover within China of all the undertakings concerned in the preceding financial year was more than CNY4 billion (approxi -
mately USD560 million), and the nationwide turnover within China of each of at least two of the undertakings concerned in the preceding financial year was more than CNY800 million (approximately USD112 million). At present, there are no special jurisdictional thresh - olds applicable to particular sectors. 2.6 Calculations of Jurisdictional Thresholds The jurisdictional thresholds are calculated based on turnover. The turnover includes the income that the relevant undertaking has earned from the sale of products and the provision of services in its preceding financial year, less the relevant taxes and the related fiscal contributions. If the sales or assets are recorded in a foreign cur - rency, the average central parity of exchange rates released by the China Foreign Exchange Trade Sys - tem in the corresponding financial or calendar year is usually adopted. The thresholds are not asset-based. 2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds The turnover of a single undertaking that has partici - pated in a concentration transaction will be the sum of the turnovers of the following undertakings: (i) the above-mentioned single undertaking; (ii) other undertakings that the single undertaking con - trols, directly or indirectly; (iii) other undertakings that directly or indirectly control the undertaking mentioned in (i); (iv) other undertakings controlled, directly or indirectly, by the undertaking mentioned in (iii); and (v) other undertakings jointly controlled by two or more undertakings indicated in (i) to (iv). The turnover of a single undertaking that has partici - pated in a concentration transaction may not include
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