EU Merger Control and China’s State-Owned Enterprises: Is Ownership Really Separate from Control?

Abstract

AbstractIn recent years, the investment activities of Chinese state-owned enterprises (SOEs) in the European Union (EU) have been subject to greater scrutiny to assess their effect not only on market competition but also on social stability and national security. The debate has been sparked in two main areas: investment arbitration and merger regulation. This chapter discusses the approach taken by the EU Commission in the application of the EU Merger Regulation to recent transactions of Chinese SOEs in the EU. The analysis aims to demonstrate that mere economic analysis fails to capture the nature of the operations of Chinese SOEs. Instead, these should be read into the broader context of China’s system of governance, which recognises a special status and role to Chinese SOEs. This situation calls for a more holistic approach in the areas of competition law enforcement through the implementation of complementary normative instruments at the EU level. The EU should seek a higher level of legal harmonisation and more coordination between national and supranational institutional actors. The implementation of common normative instruments in the area of investment protection, for example, represents an important step to complement the existing competition law regime and, perhaps, to lead to more political and economic cohesion in the EU.KeywordsChina’s State-owned enterprisesEU Merger RegulationInvestment