China’s 2nd Reading of Antimonopoly Law

Sunday, June 24, 2007 19:40
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WSJ , Shanghai Daily, and People’s Daily are all reporting that the the second draft of the impending antimonopoly law.

Last year when the first draft hit the press, many sent the nationalistic flag up the pole and declared China closed for business. Of course, while nothing turned out to be farther from the truth, and few deals have been caught up in the furvur.

What I found most interesting about this second reading though was the addition of a new provision that will look at deals from the national security standpoint. The People’s Daily reports the clause as:

“foreign mergers and acquisitions of domestic companies or foreign capital investing in domestic companies’ operation in other forms should be examined according to relevant laws and regulations if the cases are related to national security.”

While not terribly important to those who are picking up small investment in the 10-20MM USD range, this will have an impact on the mega mergers that many of the large MNCs are looking for… logistics, auto, medical, and other industries will all see the proverbial bar raised.

Of course, China is not the only one playing the security card (Senator Raises China Concerns on Blackstone)

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