Investors look west

China Law & Practice's Annual Review was released at the Awards Ceremony in Beijing this month. Part of the Annual Review comprises insights from leading lawyers. It also includes analysis of the most important news stories of the year. Please click here to view the Annual Review on issuu.

1. What have been the key legislative developments affecting M&A in the past year?

The Foreign Investment Industrial Guidance Catalogue (Amended in 2011), Catalogue for Foreign Investment in the Dominant Industries of the Central and Western Regions (2013 Revision) and the Guiding Opinions on Accelerating Promotion of the Merger and Reorganisation of Enterprises in Key Industries issued by Ministry of Industry and Information Technology and National Development and Reform Commission (NDRC) in early 2012 represent a blueprint for M&A in nine sectors, which will have a great impact on the M&A market in terms of the industries to be invested in. More policy encouragement is found in sectors relating to environmental protection, renewable energy, high technology and services. Structural adjustments and industrial integration in the nine sectors will also provide huge market opportunities for M&A transactions.

From the end of 2012 to May this year, the State Administration of Foreign Exchange (SAFE) issued the Circular on Further Improving and Revising the Foreign Exchange Control Policy on Direct Investment, the Measures for the Administration of Foreign Debt Registration and their operational guidelines, and the Provisions for Foreign Exchange Control in Connection with Direct Investment in China by Foreign Investors and their supporting documents. These provisions further simplify and integrate the processes and policies pertaining to FDI-related foreign exchange registrations, account opening and use, the receipt and payment of funds and foreign exchange settlement and sales. These will have a significant impact on the practical operation of obtaining relevant FIEs capital flows through M&A and the implementation of business strategies.