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Chinese government took a passive attitude toword the mergers and acquisition by foreign capital until 1999. But it began to allow foreign capital to merge Chinese enterprise for capital requirements of economic growth, reformation of national enterprises and reconstruction of industry. Now M&A became a main means for foreign capital to move in China.
Under such a condition, Chinese government takes three important matters into account. The first problem is the monopolization of domestic industry through the mergers aㄴnd acquisition by foreign capital, the second is that foreign capital controlls key industries of China, the third is that intangible assets may be transferred to foreign investors without a suitable appraisement.
Chinese government exerts himself to make up for a multinational M&A system now. 'The List of Industry for Foreign Investors' that is enforced from 2002 is the rule which limits Chinese enterprise for foreign investors to merge. 'The Rules about the Mergers and Acquisition by Foreign Investor' that is enforced from 2006 is summarising the rules for M&A by foreign investors. This rule enacts a provision that has foreign investors who want to merge Chinese enterprise assign a domestic consulting institution to consultant and use the results of its consulting as the price of M&A. So Chinese government is coping with the problem of property being swept. 'The Antitrust Law of China' that may be distributed sooner or later means that China completes the system to restrict the monopolization that foreign investors cause through M&A.