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The article discusses the application of two regulatory frameworks of the European Union to Chinese investments in the energy sector: merger control focused on the protection of market competition and foreign investment control based on the protection of security and public order. First, it analyzes the application of the EU-wide merger control to Chinese mergers and acquisitions with a particular focus on the role of state-owned enterprises (SOEs) as primary actors in the implementation of China's industrial policies. Second, it discusses the evolution of the EU investment control framework aimed at addressing the security risks associated with foreign direct investment (FDI) in the European energy infrastructure and the acquisition of the associated critical technologies. [ABSTRACT FROM AUTHOR]

The Anti-Monopoly Law (AML) in China allows the responsible authority for merger control to consider not only the competition interest but also other public interest reasons when it reviews a takeover or merger. Where the responsible authority considers that the benefits of a takeover or merger to the public interest outweigh the harms to competition, it may 'exempt' the transaction. This 'public interest exemption' has never been formally applied since the introduction of the law in 2008. One explanation for this can be found in the ambiguity of the law: there are no legal provisions that clarify the public interest considerations. A second explanation is that China did not establish a separate review procedure for this public interest exemption. In practice, some approval decisions made by the enforcement authority led to confusion, as it was unclear whether the transactions were 'exempted' for public interest reasons or for industrial policies. This article reflects on the role of the public interest exemption in China. By drawing lessons from the past and examining the public interest exemption regime in Germany, it aims to provide suggestions for future reforms, against the background of the promulgation of the Amendment to the AML in 2022. [ABSTRACT FROM AUTHOR]

Using data on 4784 completed mergers and acquisitions in China announced between 2002 and 2016, we find that the adoption of the Chinese Anti-Monopoly Law substantially reduces the shareholder returns for horizontal acquisitions. Based on our findings on reduced post-merger sales and returns, we argue that a loss of market power drives this negative relationship. We also find that the acquiring firms' cost efficiency does not significantly change as a result of the combination, suggesting that the decline in shareholders' wealth after horizontal mergers is not because of reduced cost efficiency. Furthermore, we conduct a series of robustness checks to examine how adopting antitrust law decreases the wealth of producing firms' shareholders. Overall, our results indicate that the government must implement stricter guidelines for antitrust policies to protect consumer welfare. [ABSTRACT FROM AUTHOR]

The year 2021 was the first remarkable year of Chinese anti-monopoly law enforcement in the digital economy. Against the macro backdrop of strengthening anti-monopoly and preventing the disorderly expansion of capital, China has closed high-profile cases and enacted relevant guiding documents, implying that competition in the digital economy is undergoing a revolution in China. However, with the strengthening anti-monopoly enforcement in the digital economy, China has also been confronted with new challenges. For example, how to make sure that the interconnectivity between platforms and data interoperability do not interfere with data security, personal privacy, and consumers' legitimate rights and interests? How to balance the curbing of almost unconstrained digital ecosystems and the enhancement of economic efficiency? With the emergence of digital giants, profound changes are taking place in the competitive relationships between various market participants, while the advantages and disadvantages of capital growth have become increasingly prominent. We propose competition authorities worldwide to learn from and cooperate with each other to solve monopolistic problems in the digital economy, considering it is a global matter. [ABSTRACT FROM AUTHOR]

The internationally dominant compulsory notification mechanism under merger control aims to remedy anti-competitive harm by blocking or conditionally approving mergers ex ante. However, such a mechanism is not free from disadvantages. As an alternative, the voluntary notification mechanism, though superficially producing fewer deterrence effects, is in effect no worse than the compulsory mechanism (CM), given its significantly less implementation costs. In order to examine which mechanism suits a given jurisdiction, it is necessary to evaluate the costs and benefits for the implementation of such a mechanism. The enforcement of the CM in China can be argued to present insufficient benefits and high costs, due to the extreme low proportion of blocked and conditional approved cases, as well as the unsatisfactory deterrence effect, and the significant constraints by implementing resources, in particular human capital. Such a particular situation in China implies that the voluntary mechanism (VM) might be advisable to be a more feasible option for young competition jurisdictions. [ABSTRACT FROM AUTHOR]

Given the rapid increase of bilateral investments between China and Switzerland over the last decade, the legal framework applicable to foreign investment has become more and more sophisticated reflecting the various interests regarding foreign investment. These interests do not only include the protection and promotion of foreign investment in order to facilitate economic growth, but also the safeguard of the effective functioning of the markets as well as the protection of national security from undue influence by foreign actors. In light of this, this paper takes a comparative law perspective on the applicable legal framework for foreign investment flowing from China to Switzerland and vice versa. By doing so, it focuses on the rights of investors under the bilateral investment treaty concluded between the two countries as well as on two ex ante review mechanisms screening transactions involving foreign investment, this being merger control and national security review. Finally, it analyzes the possibilities of Chinese investors to enter the European Union market through investments made in Switzerland and draws lessons from the Swiss experience for a future bilateral investment agreement between China and the European Union. The paper finds that, with the exclusion of 'letter-box' companies, Chinese and Swiss investors can benefit from a high degree of protection provided in the bilateral investment treaty between the two countries, which can be enforced through investor-state arbitration. The merger review processes in the two countries are largely comparable, except for the fact that the Chinese merger review can potentially be based on non-competition factors. Regarding the safeguard of national security, the two countries adopt very different approaches. While China provides for a review mechanism for individual transactions, Switzerland has conducted a general risk assessment screening all potential transactions in the foreseeable future. The two approaches fit the respective circumstances of the two countries. With respect to access to the European Union market, Chinese investors in Switzerland can expect favorable conditions only regarding very specific sectors, this being civil aviation and insurance. In view of negotiations of a future bilateral investment agreement with the European Union, China could notably consider extending most-favored nation treatment to European Union investors with respect to market access. [ABSTRACT FROM AUTHOR]

Chinese State-owned enterprises (SOEs) test the ability of the existing EU legal framework for the protection of economic competition to regulate entities originating from the systemically different socialist market economy of today's China. The question left unanswered so far is whether or not is the EU competition law sufficiently neutral and flexible to be universally applicable and able to encompass corporate structures guided and managed differently from its underlying assumptions. Thus, one of the main theses of the following analysis is that the key concepts of the undertaking and of the single economic unit under EU competition law do not correspond to the reality of Chinese SOEs. They cause difficulties of interpretation and, in particular, of application on Chinese SOEs and even could weaken the EU competition law ability to protect competition by standard procedures. To solve that puzzle for the EU competition law, the following text proposes that the Commission and the CJEU should opt for a different interpretation of the concept of undertaking / single economic unit for the purposes of SOEs ex-ante merger scrutiny on one hand, and their internal practices' ex-post investigation and sanctions on the other. [ABSTRACT FROM AUTHOR]

China's merger policy and enforcement approaches since its Anti-Monopoly Law (AML) took effect in August 2008 are by and large based on the same conceptual framework that is employed in advanced economies. While China has shown a very fast learning capability in conducting competition analysis, further capacity building in China is crucial. There is no clear evidence of industrial policy considerations being at the forefront in the eight published decisions by the Ministry of Commerce to date, except for its very early decisions. We propose a competition-neutral principle, which requires that a competition test be conducted before, and independently from, any consideration of industrial policy and argue that industrial policy matters only for competition-neutral mergers. On a more technical level, if China adopts the total welfare standard, then its treatment of efficiencies and the meaning of sufficiency of entry post merger should be modified accordingly from the US/EU consumer-oriented model. [ABSTRACT FROM AUTHOR]