Challenges and improvement of National Security Clearance in M&A by Chinese MNCs

Abstract

With the accelerated integration of the world economy and the gradual development of Chinas reform and opening-up, Chinese enterprises have been making outbound investments and cross-border mergers and acquisitions more frequently. In terms of the attitudes of countries around the world towards the entry of foreign capital, some countries welcome the entry of foreign capital. However, others restrict the cross-border M&A of foreign companies entering their countries for reasons of domestic resource, technology and industrial protection, or to protect the interests of their national industries. From the recent development trend, the national security of foreign capital is especially cleared. Hence, this paper mainly studies the national security clearance system of cross-border M&A in the United States and other developed Western countries through literature analysis and comparative analysis. It also tries to summarize the characteristics and rules from them in the light of China's national conditions, supplemented by systematic research on cases of failed cross-border M&A by Chinese enterprises that encountered national security. Based on this, it will be very beneficial to the future cross-border M&A activities of Chinese enterprises, laying a good foundation for Chinese enterprises in the world M&A field in the future.