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State Council Releases Regulations on Foreign Acquisitions Review System

On February 12, 2011, Xinhua reported that the General Office of the State Council sent out a notice about establishing the National Security Review and Approval System for Foreign Acquisitions of Chinese Companies. A multi-ministry joint committee will be created to administer the review process. The notice encompassed the System’s scope, content, working mechanism, and procedures. The national security review mainly covers companies that foreign investors may actually control. The fields the companies will deal with will include military, key agriculture products, critical energy and resources, important infrastructure, important transportation, key technology, and heavy equipment. The State Development and Reform Commission and the Ministry of Commerce are the leading agencies on the operational front. These regulations apply to investors from Hong Kong, Macau and Taiwan. The process of reviewing the acquisition of financial companies will be regulated separately.

Source: Xinhua, February 12, 2011