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国内英语新闻:Officials say review of foreign takeovers good for Chinese and foreign firms

更新时间:2024-03-28 18:28:14

  BEIJING, Feb. 17 (Xinhua) -- China's new rules for reviewing proposed mergers and acquisition (MA) deals by foreign firms on grounds of national security would benefit both Chinese and foreign investors, a Ministry of Commerce (MOC) spokesman said Thursday.

  The rules will facilitate the growth of foreign-invested enterprises (FIEs) in China and improve the quality and structure of foreign direct investment (FDI) flowing into China, MOC spokesman Yao Jian said at a press conference.

  The move also marked an improving legal environment for the security of China's business sector along with its opening-up drive, given that MA by FIEs will increasingly become a trend in the coming years, Yao said.

  The adoption of the rules in China will also increase policy transparency and improve law-based government administration, said Yao.

  Yao's words came after the State Council, China's Cabinet, announced last Saturday that it was establishing a panel to check whether MA deals struck by foreign firms in the country endanger national security.

  The panel will review attempts by FIEs to buy or merge with domestic companies whose business pertains to national defence, agriculture, energy, resources, key infrastructure, transport systems, key technology sectors and important equipment manufacturing industries, according to a statement published on the central government's website www.gov.cn.

  The review will be conducted by a foreign investment security review board under the cabinet, members of which come from the National Development and Reform Commission (NDRC), the MOC and other agencies.

  The new regulations, which take effect in March, come at a time when China is expected to see more MA deals struck by foreign firms.

  Currently, inward MA accounts for about 3 percent of China's total FDI, a sharp contrast with the global average level of more than 70 percent, said Yao. A by FIEs will become a major trend in China.

  China's taking in FDI through more MA will promote industrial consolidation and restructuring, and it will also mean more efficient utilization of the existing resources, he said.

  As the share of MA in the FDI will probably rise from the current 3 percent to 8 percent, 10 percent or even more, it is necessary to timely formulate China's own rules governing foreign takeovers in line with international standards, Yao said.

  In April 2010, the State Council said in a statement that foreign investment should be allowed to be more diversified and foreign investors encouraged to participate in the consolidation and restructuring of domestic firms via equity holdings or acquisitions.

  He Manqing, a researcher with the Chinese Academy of International Trade and Economic Cooperation of the MOC, said It is right and proper to impose regulations and requirements on proposed MA deals in the sectors of strategic importance and those involving national security.

  The introduction of the regulations conforms to the new trend in China's receiving of FDI and indicates that China's regulations on FDI are becoming more mature, said He.

  The NDRC said Wednesday that national security scrutiny would only occur when foreign companies take a majority stake in a domestic MA deal, meaning that a minority stake purchase will not trigger a review.

  The new rules draw references from similar rules in the United States, Germany and Canada, the NDRC said in a statement on its website.

  The NDRC also said that the new regulations were in line with World Trade Organization rules and did not imply that China had changed its policies on opening up and attracting FDI.

  China's FDI jumped 23.4 percent in January to 10.03 billion U.S. dollars, said Yao. The monthly growth rate was up from December's 15.6 percent.

  As the world's top investment destination, China received a total of 105.74 billion U.S dollars in FDI in 2010, up 17.4 percent year on year, the MOC said last month.