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It is said that China is developing the implementation method for foreign firms to merge and acquire Chinese enterprises. Could you give a description about this matter and how it progresses now?
It is said that China is developing the implementation method for foreign firms to merge and acquire Chinese enterprises. Could you give a description about this matter and how it progresses now?
Mergers & acquisitions is a popular manner of transnational investments and Chinese government welcomes foreign investors to invest in China using this manner. Recently, the responsible authority of the State Council has issued "Circular on Transferring Listed Companies' State-owned Shares and Corporate Shares to Foreign Firms" as well as "Interim Method for Reorganizing State-owned Enterprises by Using Foreign Investments", which gives a principled stipulation for foreign firms to merge and acquire Chinese enterprises, especially the state-owned enterprises.
The Ministry of Foreign Trade and Economic Cooperation, as the responsible authority for foreign investments, has been developing the implementation method for mergers & acquisitions by foreign investors, which will be issued soon. This method will be applicable to foreign investors' merging and acquiring domestic enterprises whatever their ownership natures are. Foreign investors' merging and acquiring Chinese enterprises should comply with Chinese laws and statutes concerning utilizing foreign investments as well as the catalogue for guidance of foreign investment industries. Foreign firms can merge and acquire Chinese firms in the form of M&A of shareholders' equity or assets and institute foreign-invested enterprises by law in Chinese territory to run their businesses.
