Freeman Briefing: Focus on Foreign Firms Obsure China's Anti-Monopoly Law's Original Intent - January 16, 2009

China’s long-anticipated Anti-Monopoly Law (AML)—the country’s first comprehensive legal framework for regulating market competition—finally went into effect in August, 2008.1 What garnered most attention among overseas analysts was a concern that the AML would be a stalking horse for economic nationalism, particularly the inclusion of a provision in the AML requiring foreign acquisitions of Chinese companies to pass a national security review to ensure that such mergers and acquisitions (M&As) do not harm China’s economic security. This raised fears among foreign investors that the AML was designed to restrict their participation in the market and unfairly protect the position of China’s state-owned enterprises (SOEs). The subsequent launch of two high-profile cases under the AML involving Microsoft and Coca Cola suggested these fears were well founded.