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Chinese Antitrust ExceptionalismHow The Rise of China Challenges Global Regulation$
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Angela Huyue Zhang

Print publication date: 2021

Print ISBN-13: 9780198826569

Published to Oxford Scholarship Online: July 2021

DOI: 10.1093/oso/9780198826569.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 04 December 2021

The EU Merger Probe into China, Inc.

The EU Merger Probe into China, Inc.

(p.119) 3 The EU Merger Probe into China, Inc.
Chinese Antitrust Exceptionalism

Angela Huyue Zhang

Oxford University Press

This chapter investigates the EU’s dilemma when applying the existing merger review framework to scrutinize acquisitions by Chinese companies. The EU merger review only acts on acquisitions of controlling interest. This means that Chinese state-owned enterprises (SOEs) can bypass the EU antitrust scrutiny by making minority acquisitions in Europe. However, minority shareholding in rivals can still create anticompetitive effects, as abundant economic literature has demonstrated. In fact, there is a blurred line between SOEs and privately owned enterprises in China, and a Chinese SOE could escape antitrust scrutiny entirely by employing a non-controlling subsidiary as a vehicle to acquire European assets. Given this regulatory dilemma, the chapter argues that a thoughtful response to acquisitions by Chinese SOEs necessitates a shift in regulatory focus from defining what constitutes an undertaking to understanding the effects of Chinese state ownership. It also cautions against deploying competition policy too broadly when reviewing Chinese SOE acquisitions. As the EU’s existing antitrust regulatory framework is not fully equipped to handle Chinese investments, it is not surprising to see that both the European Union and some of its Member States are tightening their foreign investment review to scrutinize Chinese takeovers.

Keywords:   Chinese companies, EU merger review, Chinese state-owned enterprises, EU antitrust regulation, minority acquisitions, minority shareholding, Chinese state ownership, competition policy, Chinese investments, Chinese takeovers

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