The Research On The Improvement Of China’s National Security Review System For Foreign Mergers And Acquisitions

With the continuous development of economic globalization, the total share and scale of China’s foreign mergers and acquisitions (herein after as M&As) within the total foreign investment increased gradually. However, foreign M&As is a "double-edged sword", on the one hand, it provides the host country with advanced technologies and managerial experiences, on the other hand, it poses threats and risks to the national security of the host country. Hence, the concern on the national security issues is aroused among all the countries in the world. In order to avoid the negative impact of foreign M&As on national security, many countries have established national security review system for foreign M&As. After having experienced more than30years of opening up to the outside world and the practice of the legal system construction. China has basically established national security review system for foreign M&As. Nevertheless, currently foreign M&As cases influencing national security occurs frequently in China, some cases are even worse, which shows that there are a lot of loopholes in the national security review system, This thesis aims to explore how to improve and establish effective national security review system for foreign M&As. The overall structure of this paper, research method and content summary is as follows.The first part of this thesis analyzes the national security review system for foreign M&As from a theoretical point of view. Firstly, the concept of national security review system for foreign M&As is defined and cognized from different perspectives, and subsequently the advantages of national security review system for foreign M&As is analyzed by way of comparison, then put forward that the national security review system for foreign M&As is necessary and irreplaceable.The second part of this article focuses on the empirical analysis. Firstly, a research on the development of the national security review system for foreign M&As in China is made. Secondly, the status quo of the system is analyzed according to the scope of the review, the process of review and the contents of the review respectively. On this basis, we can draw a conclusion that although China has established national security review system for M&As. there are still many shortcomings and deficiencies, such as lower-leveled legislation hierarchy, weak authority, principled expression, difficulty in enforcement, the vague of the elements to be reviewed and so forth.The third part of the thesis focuses on the study of the national security review systems of four typical countries, such as the United States, Canada. United Kingdom and Japan, through comparative studies and empirical analysis, from which we can acquire some worth-learning experiences for future reference. Subsequently, an objective evaluation on the mature experiences from these four countries is madeThe last part is the key of this thesis. An exploration is made to find solutions to solve the problems raised in the second part of the thesis accordingly. In the end. a constructive conclusion is drawn, that is. we should draft the foreign Investment Law. detail the scope, standard, and procedure of the national security review, establish effective oversight mechanisms, relief mechanisms as well as punitive measures to promote the comprehensive improvement of China’s national security review system for foreign M&As.