CHINA Law and Practice Contributed by: Shuting Qi, Han Kun Law Offices
2.2 Primary Regulators China’s M&A regulatory landscape involves multiple authorities, each responsible for a distinct aspect of the transaction: • The State Administration for Market Regulation (SAMR) conducts anti-monopoly reviews of con - centrations of undertakings in M&A activities. It investigates both concentrations that meet noti - fication thresholds and and those that, despite falling below thresholds, are likely to eliminate or restrict market competition, and penalises those that have been illegally implemented. • The SAMR also supervises the implementation of restrictive conditions attached to approved con - centrations, and handles business registration and modification filings for foreign-invested enterprises. • The Ministry of Commerce of the People’s Republic of China (MOFCOM) supervises foreign invest - ment-related M&A compliance. It monitors foreign investment data, statutory initial reporting, change and annual information reporting by foreign-invest - ed enterprises, and verifies compliance with foreign investment laws and national security review. • The National Development and Reform Commis - sion (NDRC) reviews transactions with implications for national economic planning, strategic sectors, or foreign investment subject to national security review. • The State Administration of Foreign Exchange (SAFE) oversees cross-border capital flows and foreign exchange activities related to M&A. This includes administering the registration process for cross-border direct investment and securities- related transactions, in accordance with applicable foreign exchange regulations. In addition, the China Securities Regulatory Commis - sion (CSRC) and stock exchanges in Shanghai and Shenzhen are the primary regulators for M&A involv - ing listed companies, responsible for reviewing major asset restructurings, approving share issuances, supervising disclosure obligations and protecting minority shareholders. Local government authorities may additionally play a facilitative or approving role in transactions involving local state-owned enterprises.
2.3 Restrictions on Foreign Investments Foreign investment in China is currently subject to market access restrictions primarily governed by two parallel negative list regimes: • The Special Administrative Measures (Negative List) for the Access of Foreign Investment (2024 Edition) set out targeted restrictions on market access for foreign investment entering specific sectors. It currently contains 29 restricted or prohibited items across 11 industries, addressing outright prohibitions as well as restrictions includ - ing shareholding caps and operational conditions. Notably, the 2024 Edition has eliminated the last remaining foreign investment restrictions in the manufacturing sector. This pivotal reform unlocks broader investment opportunities for foreign capi - tal. • A unified Market Access Negative List (2025 Edi - tion) applies equally to domestic and foreign inves - tors, outlining six fully prohibited sectors and 100 approval-required activities to maintain a transpar - ent and fair market access threshold for all market entities. 2.4 Antitrust Regulations Business combinations in China are governed by the PRC Anti-Monopoly Law, the Provisions on the Review of Concentrations of Undertakings and sup - porting merger control rules, with pre-closing notifica - tion and review administered by the SAMR. Pursuant to the Provisions of the State Council on Notification Thresholds for Concentrations Between Undertakings, transactions meeting statutory turno - ver thresholds require mandatory prior declaration to the SAMR. Specifically, the declaration obligation is triggered when a concentration meets either of the following thresholds: • the total global turnover of all the undertakings par - ticipating in the concentration in the last account - ing year exceeded CNY12 billion, and at least two of these undertakings each had a turnover of more than CNY800 million within China in the last accounting year; or • the total turnover within China of all the undertak- ings participating in the concentration in the last
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