This book by Alexandr Svetlicinii, associate professor at the University of Macau, focuses on the corporate governance of Chinese state-owned enterprises (SOEs) and the application of EU merger control rules to Chinese SOEs’ acquisitions as clearly delineated by the title. Timely in appearance after the signature of the EU–China Comprehensive Agreement on Investment last December, it provides a comprehensive guide to understand the evolving experiences of the EU merger control regime in dealing with Chinese outbound investment by its SOEs and sheds light on other regulatory tools as a response to the questions raised during the merger control assessment of SOEs’ acquisitions.
Dividing the work into four parts, the book begins with Part I, which introduces how the SOEs are generally viewed and treated under EU merger control regime. To better understand their status, Prof. Svetlicinii looked deeply into the cases involving SOEs and clarified the definitions of “undertakings,” “persons,” the determination of “single economic unit,” which are fundamental for the applicability of EU Merger Regulation (EUMR). In terms of the substantial assessment of the notifications involving SOEs, it is pointed out that the existence of state control over SOE’s business strategy and its potential coordination with other SOEs should be considered when developing the anti-competitive scenarios.
The second part of this book provides an explicit presentation of Chinese SOEs from the perspective of its corporate governance and regulatory framework under Chinese Anti-Monopoly Law. As Prof. Svetlicinii indicated, the corporate structure of Chinese SOEs is characterized by “the ownership-based governance exercised by the Chinese State-Owned Assets Supervision and Administration Commission” and “the political governance exercised by the party organizations.” The recently reinforced SOE reform stresses the role of SOEs to support industrial policy goals. When SOEs are involved in the concentrations, the implementation of industrial policies often has a predominant influence on the application of Chinese merger control rules.
The penultimate part offers a detailed and critical analysis on the assessment of Chinese SOEs’ acquisitions under the EU merger control scrutiny. Exemplified by significant cases such as Bluestar/Elkem, DSM/Sinochem, CNAC/Koor Industries, EDF/CGN/NNB, ChemChina/Syngenta, it is shown that the EU Commission frequently adopts the “worst-case scenario” approach in the assessment of the “single economic unit” to be able to intervene in the transactions. However, the EC has left the question of the identification of the “single economic unit” (comprising all or only certain Chinese SOEs) unanswered. According to Prof. Svetlicinii, this approach can be seen as problematic and would need further reflection.
The last part develops the above discussions on the limitations of EU merger control rules by proposing some complementary tools to deal with Chinese SOEs’ acquisitions. In addition to the proposal of reforming the EU merger control, it is also mentioned by Prof. Svetlicinii the possibility for the Member States to invoke public interest exception for national security and media plurality considerations. Other important tools include the EU framework for the coordination of foreign investment screening, Member States’ national foreign investment screening regimes and the Commission’s White Paper on foreign subsidies, which will have profound effects on Chinese SOEs’ acquisitions.
With the expansion of China’s “going out” strategy, Chinese SOEs and their overseas investments are playing an ever-increasing role in this process. The book comes under this context and offers valuable insight into the relevant rules in the dimension of the EU. It is a must-read for researchers, legal practitioners and government officials who would like to have an in-depth understanding of the topic. Not only that, it can be a very useful resource for anyone interested in EU–China economic relations.
