Hong Kong, Feb 17 (Yonhap) China will start reviewingmerger and acquisition (M&A) deals struck by foreign firms inthe country next month in a bid to ensure national security,the cabinet said today.
Starting from March, foreign investments in military,agriculture, energy and resources, infrastructure, transportsystems, technology sectors and other "important equipment"manufacturers may be subject to reviews, the State Council,the Chinese cabinet, said in a statement published online.
The government will launch a "foreign investmentsecurity review board" under the cabinet, of which memberswill come from the National Development and Reform Commission,the Ministry of Commerce and other agencies.
"The State Council said reviews will scrutinize factors,including the impacts on China''s defense technology researchand development, the country''s economic integrity and people''sdaily life," said Li Hong, a columnist for the officialPeople''s Daily.
Under the new regulation, Chinese government agencies,trade associations, competitors, suppliers and other relatedparties will be allowed to apply for reviews of M&A dealsinvolving foreign investors.
In the past, China had blocked a number of foreignattempts to buy into its local companies.
Coca-Cola Co.''s USD 2.4 billion bid for the country''stop juice maker, Huiyuan Co., was rejected in 2009.
In 2008, buyout giant Carlyle Group''s375 million bidfor Xugong Group Construction Machinery Co., the nation''sbiggest construction equipment maker, was turned down, whileRussia''s Evraz Group failed to take control of Delong HoldingsLtd., a Chinese steelmaker listed in Singapore, in a1.5billion deal.
Luxembourg-based steel giant ArcelorMittal Group was notsuccessful in gaining a majority stake in China Oriental Groupin 2007.
Meanwhile, the world''s second-largest economy attracted
105.7 billion in foreign direct investments in 2010, up 17.4percent from 2009. (Yonhap)