Advances in Economics, Management and Political Sciences
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Proceedings of the 2nd International Conference on Business and Policy Studies
Series Vol. 12 , 13 September 2023
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Dilemma and Countermeasures to National Security Review in M&A by Chinese Companies in the US
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Abstract
The national security review is an inescapable area for foreign investors to invest in the US. In recent years, the number of CFIUS reviews of cross-border mergers and acquisitions has been on the rise, as well as the number of vetoes, reflecting concerns that the US may lose its global leadership. At a time when competition between the US, and China is intensifying, CFIUS has shown a natural hostility towards Chinese investors, and the situation for Chinese companies in the US is not promising, with a higher rate of failed M&A than in other countries. This has seriously impacted Chinese direct investment in the US. This paper suggests that the reasons for this problem are twofold. On the one hand, there is the deviant treatment of Chinese companies by CFIUS. On the other hand, Chinese companies have their reasons for failing to enter the US including the fact that most of their acquisitions occur in sensitive areas involving national security and ignoring the CFIUS review process. Based on this, this paper argues that Chinese companies should not only formulate a clear M&A strategy before the M&A process but also take the initiative to negotiate with CFIUS and seek judicial remedies when necessary.
Keywords
national security, Chinese enterprises, CFIUS
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Data Availability
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- Volume Title
- Proceedings of the 2nd International Conference on Business and Policy Studies
- ISBN (Print)
- 978-1-915371-67-6
- ISBN (Online)
- 978-1-915371-68-3
- Published Date
- 13 September 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/12/20230612
- Copyright
- 13 September 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited