CHINA Law and Practice Contributed by: Wei Chen, Yue Zhang, Hao Peng and Yi Sun, JunHe LLP
7.3 Restrictions on Foreign Investments There are certain restrictions on foreign invest- ment in China, primarily listed in the Negative List for Foreign Investment Access (the “Foreign Investment Access Negative List”) published by the relevant PRC authority. These are as follows. • Foreign investors will not invest in any prohib- ited sectors in the Foreign Investment Access Negative List. • Foreign investors will meet the investment conditions for the restricted sectors in the Foreign Investment Access Negative List. • For the sectors not included in the Foreign Investment Access Negative List, theoretically no specific filing is required for the foreign investment. However, it may still be subject to other filings such as the national security review (the “NSR”), depending on the sectors, locations, controlling right or other factors involved in the foreign investment. 7.4 National Security Review/Export Control NSR There is a NSR of foreign investment acquisi- tions in China. Under the current NSR regime, there are no officially published specific restric- tions or considerations for investors or buyers based in a particular part of the world. Industries or areas that may be subject to the NSR include the following. • Investment in military industry, military auxiliary industry and other fields related to national defence security and investment in areas surrounding military installations and military industrial installations.
tive List for Market Access”published by the rel- evant PRC authority. The “Negative List for Mar- ket Access” includes the sectors that companies are not allowed to enter, as well as the restricted sectors companies can only enter with prior administrative approval. In theory, companies have free access to all of the sectors that are not on this “Negative List for Market Access”. Restricted sectors in the technology industry and the respective regulatory bodies include the following. • Basic and value-added telecommunications services (the Ministry of Industry and Informa- tion Technology or its local branches). • Radio stations, radio frequency, satellite TV, cable TV (the Ministry of Industry and Infor- mation Technology and the National Radio and Television Administration or their respec- tive local branches). • Online media and publication (the National Radio and Television Administration, the Press and Publication Administration and the Ministry of Culture and Tourism, or their respective local branches). • Online games (the Press and Publication Administration or its local branches). The timeframe for obtaining approvals in each restricted sector varies, but normally take at least three to six months. 7.2 Primary Securities Market Regulators The CRSC is the primary securities market regu- lator for M&A transactions in China. Other mar- ket regulators may be involved if the M&A trans- action is in certain restricted sectors or involves foreign investment.
• Investments in important: (a) agricultural products; (b) energy and resources;
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