Merger Control 2025 Comparisons

The Anti-Monopoly Law of the People’s Republic of China (AML), effective as of 1 August 2008, as amended on 1 August 2022 (“AML Amendments”), is the primary legislation in China governing the merger control regime. Chapter 4 of the AML provides for the “Concentration of Undertakings”.

Along with the AML, a number of implementing regulations and guidelines in relation to merger control have been issued and amended, including:

• Provisions of the State Council on Thresholds for Notification of Concentration of Undertakings, promulgated by the State Council, amended and effective as of 22 January 2024;
• Guidelines on the Definition of Relevant Market by Anti-Monopoly Commission of the State Council (“Guidelines on Market Definition”), promulgated by the State Council and effective as of 24 May 2009;
• Provisions on the Review of Concentrations of Undertakings (“Provisions on Concentration Review”), issued by the State Administration for Market Regulation (SAMR) on 10 March 2023 and effective as of 15 April 2023;
• Guidance on the Declaration of Simple Cases of Concentrations of Undertakings, issued and amended by SAMR and effective as of 29 September 2018;
• Guidance on the Standardisation of the Case Name for the Notification of Concentrations of Undertakings, issued and amended by SAMR and effective as of 29 September 2018; and
• Guiding Opinions on the Notification of Concentrations Between Undertakings, issued by SAMR and effective as of 29 September 2018;
• Guiding Opinions on Declaration Documents for Concentrations of Undertakings, issued and amended by SAMR and effective as of 29 September 2018;
• Guidelines for the Review of Horizontal Concentrations of Undertakings (“Horizontal Merger Review Guidelines”), issued by SAMR and effective as of 10 December 2024; and
• Benchmark for Discretion over Administrative Sanctions for the Illegal Implementation of Concentrations of Undertakings (for Trial Implementation) (“Trial Discretion Benchmark”), issued by SAMR and effective as of 19 February 2025.

Besides the merger-specific regulations and guidelines, SAMR has also issued a series of specialised guidelines in which it provides guidance for merger control filing and review with respect to specific matters or sectors, including, among others, the Anti-Monopoly Compliance Guide for Undertakings, the Anti-Monopoly Guidelines for Standard Essential Patents, and the Anti-Monopoly Guidelines for the Pharmaceutical Sector.

The AML (along with its accompanying regulations) is the only legislation on merger control for foreign transactions. China also has various laws to regulate foreign investment, eg, the foreign direct investment (FDI) regime and national security review (NSR) when foreign investments are involved.

FDI Regime

The primary law governing foreign investment in China is the Foreign Investment Law (FIL), which was promulgated on 15 March 2019 and came into effect on 1 January 2020. Based on the FIL, China has adopted a “negative list” mechanism, setting out the industry sectors in which foreign investment is prohibited or restricted. Foreign investors may not invest in any field prohibited by the negative list for foreign investment, and must meet certain investment conditions (eg, shareholding limits or senior management requirements) stipulated under the negative list in order to invest in the fields where foreign investments are restricted. For industries not on the negative list, foreign investors must be treated on a par with their domestic counterparts.

The negative list is released and updated yearly by or upon approval by the State Council. The current Negative List (2024 edition) is available here.

NSR Regime

The Measures for the Security Review of Foreign Investments (“NSR Measures”) issued by the National Development and Reform Commission and the Ministry of Commerce (MOFCOM) on 19 December 2020 and effective as of 18 January 2021 set out the foreign investments that fall within the scope of NSR review. Briefly, foreign investments involving a specific business sector may not close the deal until NSR approval is granted.

For a detailed introduction to the NSR regime, see 9. Foreign Direct Investment/Subsidies Review.

Currently, SAMR is responsible for the overall enforcement of the AML in China. SAMR consists of three divisions:

• Division I, whose major duty is enforcement against monopolistic conducts, including monopoly agreements and abuse of market dominance;
• Division II, whose major duties are merger control review and investigations into instances of failure to notify before closing; and
• Division for Co-ordination of Competition Policy, whose major duties are drafting competition policies and implementing fair competition review.

In July 2022, SAMR announced a three-year pilot programme to take place from 1 August 2022 to 31 July 2025, during which SAMR will delegate the initial review of certain simplified procedure merger filings to five provincial Administrations for Market Regulation (“Provincial AMRs”) in Beijing, Shanghai, Chongqing, Shaanxi and Guangdong.

Parties to transactions that require merger clearance will continue to submit filings to SAMR, but SAMR may delegate cases to the Provincial AMRs at its discretion and inform the filing parties of the delegation. While the provincial AMRs will review cases assigned to them, SAMR remains the final decision maker on all merger filings. During the review process, SAMR and the Provincial AMRs may also consult other industry regulators regarding their opinions on transactions from a regulatory or industry policy perspective.

Notification in China is compulsory as long as the proposed concentration meets the jurisdictional thresholds.

However, the undertakings could be exempted from compulsory notification under the following circumstances:

• one of the undertakings involved in the concentration holds at least 50% of the voting shares or assets of each of the other undertakings; or
• at least 50% of the voting shares or assets of each undertaking involved in the concentration are held by one undertaking not involved in the concentration.

Pursuant to Article 58 of the AML, if undertakings fail to seek clearance in relation to a notifiable concentration, which thus may have the effect of excluding or limiting competition, SAMR may at its discretion impose the following sanctions on the undertakings:

• an order to cease implementing the concentration;
• an order to dispose of the shares or assets within a specified period of time, transfer business within a specified period of time and take other necessary measures to restore the status quo ante; and/or
• a fine of up to 10% of the previous financial year’s sales revenue.

There is a fine of up to CNY5 million if the concentration of undertakings does not have the effect of excluding or limiting competition.

In cases where the violation of the AML is “extremely severe”, with an “extremely adverse” impact and “especially serious” consequences, SAMR can increase the fine amount by two to five times.

The revised penalty standards (ie, a fine of up to 10% of the previous year’s sales revenue of the undertaking concerned or a fine up to CNY5 million) have been applied since early 2024. From 2024 to May 2025, SAMR published five administrative decisions on failure-to-notify cases, with fines ranging from CNY700,000 to CNY1,750,000 and an average fine of approximately CNY1,378,600 per undertaking. The factors stipulated in the Trial Discretion Benchmark were already considered in these cases. For more details, see 2.13 Penalties for the Implementation of a Transaction Before Clearance.

In July 2021, SAMR published its penalty decision on a failure-to-notify case regarding the acquisition of CMC by Tencent Music, which is the only case where SAMR imposed remedies for failure-to-notify cases, and Tencent was fined CNY50,000, which was the maximum penalty under the pre-amended AML.

All penalties imposed for cases of failure to notify are made public by SAMR.

In China, certain types of transactions that constitute a “concentration of undertakings” are caught if they meet the jurisdictional thresholds. A concentration of undertakings is defined as:

• a merger of undertakings;
• acquiring control over one or more undertakings through acquisition of equity or assets; and
• acquiring control or the ability to exercise a decisive influence over one or more undertakings under a contract or any other means.

Internal restructuring or reorganisations are generally not caught if they fall under the exceptions outlined in 2.1 Notification.

Based on the definition of “concentration”, transactions that do not involve the transfer of shares or assets but still concern the acquisition of control (eg, change of articles of association in relation to the appointment of directors and their voting mechanism) could potentially be caught.

Pursuant to the Provisions on Concentration Review, the concept of “control” in a concentration includes both “sole control” and “joint control”.

SAMR will take into account the following factors when determining whether an undertaking acquires control over another undertaking:

• transaction purpose and future plans;
• change of shareholding structure;
• matters put to vote, voting mechanism, historical attendance rates and the votes in the shareholders’ meetings or any other authority;
• composition, voting mechanism, historical attendance rates and the votes of the board and other decision-making or management bodies;
• the appointment and dismissal of other senior management;
• the relationship between the shareholders and board directors; and
• the existence of major business relationships and co-operation agreements.

The acquisition of minor interests less than control can still be caught based on the acquiring party’s right to appoint directors or senior management, veto rights against major business decisions, or control over key resources.

The current jurisdictional thresholds of merger control in China are only based on turnover, as follows:

• the combined worldwide turnover of all the undertakings concerned in the preceding financial year was more than CNY12 billion (approximately USD1.68 billion based on the exchange rate as the average central parity of exchange rates released by the China Foreign Exchange Trade System in 2024, ie, USD/CNY is 1:7.1217), and the nationwide turnover within China of each of at least two of the undertakings concerned in the preceding financial year was more than CNY800 million (approximately USD112.33 million); or
• the combined nationwide turnover within China of all the undertakings concerned in the preceding financial year was more than CNY4 billion (approximately USD561.66 million), and the nationwide turnover within China of each of at least two of the undertakings concerned in the preceding financial year was more than CNY800 million (approximately USD112.33 million).

At present, there are no special jurisdictional thresholds applicable to particular sectors.

The jurisdictional thresholds are calculated based on turnover. The turnover includes the income that the relevant undertaking has earned from the sale of products and the provision of services in its preceding financial year, less the relevant taxes and the related fiscal contributions.

If the sales or assets are recorded in a foreign currency, the average central parity of exchange rates released by the China Foreign Exchange Trade System in the corresponding financial or calendar year is usually adopted.

The thresholds are not asset-based.

The turnover of a single undertaking that has participated in a concentration transaction shall be the sum of the turnovers of the following undertakings: (i) the above-mentioned single undertaking; (ii) other undertakings that the single undertaking controls, directly or indirectly; (iii) other undertakings that directly or indirectly control the undertaking mentioned in (i); (iv) other undertakings controlled, directly or indirectly, by the undertaking mentioned in (iii); and (v) other undertakings jointly controlled by two or more undertakings indicated in (i) to (iv).

The turnover of a single undertaking that has participated in a concentration transaction shall not include the turnover generated among undertakings indicated in (i) to (v) above.

The seller shall only include the portion of the turnover that relates to the target. In the case of asset acquisition, if the seller no longer has controlling power over the asset sold, only the turnover generated by such asset shall be calculated; and in the case of equity acquisition, if the seller no longer has controlling power over the target company after the transaction, only the turnover of the target company shall be calculated.

The group-wide turnover shall be the sum of the turnovers of the undertakings indicated in (i) to (v) above.

If the undertakings have acquired any business during the reference period, the turnover of the newly acquired business shall be calculated. If the undertakings have disposed of any business during such period, the turnover of the disposed-of business shall be excluded.

Foreign-to-foreign transactions are subject to merger control provided the jurisdictional thresholds are met.

There is no other local effect test except for the jurisdictional thresholds.

A local presence is not required.

When a target has no sales and/or assets in China, a filing is not required unless there are multiple buyers that are acquiring joint control of the target and the buyers have reached the jurisdictional thresholds.

There is currently no market share jurisdictional threshold.

The establishment of a joint venture is subject to merger control review if more than two undertakings are determined as having control over the joint venture and the notification thresholds are met.

There are not known to be any special rules for determining whether joint ventures meet the jurisdictional thresholds.

Where a transaction does not meet the jurisdictional thresholds, but facts and evidence collected establish that such concentration has or may have the effect of eliminating or restricting competition, SAMR can initiate an investigation in accordance with the law.

Since the AML Amendments, SAMR has not yet actually called in any below-threshold transaction.

There is no statute of limitations on SAMR’s ability to investigate a transaction.

A transaction may not be closed before clearance.

Pursuant to Article 58 of the AML, if undertakings implement the transaction before clearance and the transaction thereby has the effect of eliminating or restricting competition, SAMR may at its discretion impose the following sanctions on the undertakings:

• an order to cease implementing the concentration;
• an order to dispose of the shares or assets within a specified period of time, transfer business within a specified period of time and take other necessary measures to restore the status quo ante; and/or
• a fine of up to 10% of the previous financial year’s sales revenue.

There is a fine of up to CNY5 million if the concentration of undertakings does not have the effect of excluding or limiting competition.

The final amount of the penalty will be determined based on the Trial Discretion Benchmark. Key rules and procedures include:

• For cases with no competition concerns, there is a three-step approach:
1. There is an initial amount of CNY2.5 million, subject to several mitigating and aggravating factors. Mitigating factors, such as voluntarily reporting and voluntarily taking corrective measures, may result in a lower initial amount of CNY1 million, while aggravating factors, such as obstruction of enforcement or refusal to co-operate, may result in a higher initial amount of CNY4 million.
2. On top of the initial penalty amount, each downward adjustment factor reduces the penalty by 10%, and such downward adjustments may add up to no more than a 60% reduction; each upward adjustment factor increases the penalty by 10%-20%. Downward adjustment factors include: (1) no actual operation or production, or no effective exercise of control; (2) first-time offence; (3) proactive co-operation with the investigation, providing truthful statements of facts and important evidence; (4) proactive rectification, establishing or improving the antitrust compliance system and effectively implementing such system; (5) the concentration is above the thresholds yet the turnover of the undertaking within China in the previous fiscal year was below CNY800 million and the undertaking proactively co-operates; and (6) other factors determined by SAMR. Upward adjustment factors include: (1) providing misleading or false materials or information to SAMR; (2) adopting passive approaches such as delaying, slacking or evading, and thus failing to co-operate with the investigation or provide relevant materials; and (3) other factors determined by SAMR.
3. SAMR will finalise the penalty amount considering the particularity of the case. Normally, all penalties imposed should be subject to the maximum penalty amounts. In cases of severe violations, SAMR may at its discretion impose a penalty ranging from two to five times the maximum penalty amounts provided in the AML.
• For cases with competition concerns, the penalty amount will be calculated in reference to the methods set out above, while considering factors such as the duration and scope of the anti-competitive effects, efforts in remedying the illegal concentration, etc.
• Undertakings may be exempted from administrative sanctions in certain circumstances such as first-time offence plus voluntary reporting and restoring to pre-concentration status.

SAMR has imposed such penalties against transactions implemented before clearance. For details please see 2.2 Failure to Notify.

These penalties are made public by SAMR.

Penalties have been imposed on foreign-to-foreign transactions in recent years.

There are no express provisions within the AML providing for general exceptions to the suspensive effect. In practice, undertakings may inform SAMR of special circumstances, such as public bids, so as to accelerate the review process.

There are no express provisions within the AML providing for a waiver or a derogation from the suspensive effect.

Pursuant to Article 26 of the AML, the parties shall not close the transaction before clearance. We are not aware of any circumstances where SAMR has permitted closing before clearance.

It might be possible to carve out certain business in China to implement global closing. However, this would need to be reviewed case by case and would usually require discussions with the authorities.

There is no specific notification deadline. However, the parties must not close the proposed transaction before obtaining antitrust clearance in China; otherwise, the parties involved in the proposed transaction will be subject to failure-to-notify penalties under the AML. In practice, the notification is submitted soon after signing the transaction documents.

SAMR reserves power to call in a transaction if such transaction has the effect of eliminating or reducing competition. For below-threshold transactions that are called in by SAMR after closing, the parties must submit a notification within 120 days upon receipt of SAMR’s written notice.

A binding agreement is normally required for notification.

No filing fees are required for notification.

As regards merger transactions, all undertakings involved in the merger are obligated to submit a notification. For other transactions, the undertaking that has acquired the control or ability to exercise decisive influence is obligated to submit a notification, and the other undertakings shall co-operate.

The information required for a filing mainly consists of the basic information of the parties (eg, name, address, business scope, turnover of the preceding year and shareholding structure), description of the transaction, market definition, competition analysis, market share data of the parties and major competitors, etc.

The documents required for a filing mainly consist of the notification form (which contains the above-mentioned required information), transaction documents, business licences of the parties and relevant affiliates, audited financial statements, annual report, power of attorney (if any), supporting documents for the market share and competition analysis, a truthfulness and accuracy statement, and other documents that may be required by SAMR.

The parties must submit their notification documents and materials in Chinese. If the original documents are written in a foreign language, a Chinese translation (or at least a Chinese summary) must be submitted with the original foreign language version attached.

If the parties are foreign undertakings, they must submit an apostilled certificate of incorporation or a certificate of incorporation notarised by the local notary authority and authenticated by the China Embassy.

On 12 October 2024, SAMR updated the notification form and the publication form for the simplified procedure. Certain information such as the undertaking’s history of establishment and significant changes is no longer required.

As provided by Article 32 of the AML and Article 24 of the Provisions on Concentration Review, if the notification is deemed incomplete, SAMR may require the parties to submit additional documents and materials within a specified period of time. If the parties fail to do so, SAMR is entitled to “stop the clock” and suspend the review period.

If the parties intentionally submit inaccurate or misleading information, SAMR may not accept the filing application or revoke the acceptance decision for an already filed case, and may launch an investigation on relevant undertakings or individuals.

The relevant undertakings may face a fine of up to 1% of the preceding year’s sales revenues, or a fine of up to CNY5 million if there were no sales generated in the preceding year. Relevant individuals may each face a fine of up to CNY500,000 or even criminal liabilities.

In cases of severe violations, the penalties could escalate, ranging from two to five times the above-mentioned amounts. These penalties would be recorded in the businesses’ credit records, making the information available to the public.

As of 31 December 2024, we are not aware of any public decisions in which these measures have been implemented.

There are two stages that a merger filing will go through with SAMR: a pre-acceptance phase and a formal review phase:

• Pre-acceptance phase, ie, from the initial filing until SAMR considers that the filing documents are complete and accepts the filing and starts the formal review. There is no definite period for the pre-acceptance phase under the law. In practice, it normally takes one to two months.
• Formal review phase, which includes:
1. Phase I review (“Phase I”), which spans a maximum of 30 calendar days from the date on which SAMR informs the notifying party in writing that the filing has been formally accepted;
2. Phase II review (“Phase II”), which spans a maximum of 90 calendar days from the date on which SAMR informs in writing of the beginning of Phase II; and
3. Phase III review (“Phase III”), which extends the review for another 60 calendar days under certain circumstances.

Based on past experience, for a transaction without competition concerns, if filed under the normal procedure, it normally takes about three to six months from the initial filing to get clearance; and if filed under the simplified procedure, it normally takes about one-and-a-half to two months from the initial filing.

From the implementation of the AML Amendments to 30 September 2024, average review times were 25.42 days for cases involving state-owned enterprises, 24.72 days for cases involving private undertakings, and 22.53 days for cases involving foreign undertakings.

In 2024, SAMR reviewed a total of 643 filings, including one filing that was cleared conditionally, 623 filings that were cleared unconditionally, and 19 filings that were withdrawn after official acceptance. The average review time for all filings reviewed in 2024 was 24.7 days, showing a decrease of one day from that in 2023.

The parties may apply to SAMR for pre-notification discussion and this is typically encouraged, even if it is not a mandatory process.

The parties may prepare the specific issues for discussion and apply for the discussion in writing. The process is treated confidentially.

For those notifications with fewer competition concerns, SAMR normally asks one to three rounds of questions during the review process. For notifications with more competition concerns, SAMR may ask more questions. Such requests usually will not suspend the review process if the parties submit the information requested in time.

The notification form for the simplified procedure is shorter than the normal one and requires less information. The simplified procedure is applicable under the following circumstances:

• where all of the undertakings involved in the transaction have a collective market share of less than 15% in the same relevant market;
• where the undertakings involved in the transaction have a vertical relationship, and each of them has or collectively they have a market share of less than 25% in the vertical market;
• where the undertakings involved in the transaction do not have a vertical relationship, and each of them has less than a 25% share in all related markets;
• where the undertaking involved in the transaction establishes a joint venture outside of China, and the joint venture does not engage in economic activity in China;
• where the undertaking involved in the transaction acquires the equity or assets of a foreign enterprise, and the foreign enterprise does not engage in economic activity in China; or
• where a joint venture that is jointly controlled by two or more undertakings becomes controlled by one or more of them through the transaction.

As provided by Article 34 of the AML, SAMR shall prohibit a concentration of undertakings if such concentration has or may have the effect of eliminating or restricting competition, unless the undertakings involved in the concentration are able to prove that the positive impact of the said concentration on competition significantly outweighs the adverse effect thereof, or such concentration is in the public interest.

Article 33 of the AML set out the factors to be considered by SAMR in assessing the competitive effects of a merger:

• market shares and market control power of the merging parties in the relevant market;
• concentration levels of the relevant market;
• impact of the concentration on market entry and technological development;
• impact of the concentration on consumers and other relevant undertakings;
• impact of the concentration on national economic development; and
• other factors that should be considered.

The Provisions on Concentration Review provide further guidance on the factors set out by the AML in assessing the competitive effects of a merger, as outlined below.

Market Control Power

When assessing the market control power of the merging parties, the following factors shall be taken into account:

• merging parties’ market share in the relevant market;
• the substitutability of products or services;
• the capability, financial and technical conditions to control the sales or raw material procurement market;
• the capability to control and process data;
• market structure of the relevant market;
• production capability of other undertakings;
• purchase capability of downstream customers and the capability to switch suppliers; and
• market entry of potential competitors.

Concentration Level of Relevant Market

When assessing the concentration levels of the relevant market, the number of undertakings in the relevant market and their market share shall be considered.

For horizontal mergers, the Horizontal Merger Review Guidelines provide the assessment framework based on the Herfindahl-Hirschman Index (HHI), as outlined below:

• If post-concentration HHI < 1000, or ΔHHI < 100, SAMR will normally consider that there are no anti-competitive effects.
• If post-concentration HHI is between 1,000 and 1,800, and ΔHHI > 100, SAMR tends to consider the transaction as having or likely having anti-competitive effects and therefore consider it necessary to conduct a comprehensive review.
• If post-concentration HHI > 1,800, and ΔHHI is between 100 and 200, SAMR is more inclined to believe there are anti-competitive effects which require a comprehensive review.
• If post-concentration HHI > 1,800, and ΔHHI > 200, SAMR will normally presume there are anti-competitive effects, unless the parties can prove otherwise.

We understand that SAMR is also drafting a detailed guidance in relation to non-horizontal mergers, which may be released in the year of 2025.

Market Entry and Buyer Power

When assessing the impact on market entry, the following factors shall be considered:

• merging parties’ influence on market entry through input, sales and procurement channels, key technologies, key facilities, data, etc; and
• the possibility, timeliness and adequacy of market entry.

The buyer power may be assessed based on:

• the concentration of buyers; and
• the buyers’ ability to switch suppliers.

As provided in the Horizontal Merger Review Guidelines, sufficiently easy market entry and strong buyer power can serve as countervailing factors that may mitigate the potential anti-competitive effects of horizontal mergers.

Technological Development

When assessing the impact on technological development, factors such as the impact on the incentive and capacity for technological innovation, investment in and utilisation of R&D, and integration of technological resources shall be considered.

Impact on Consumers

When assessing the impact on consumers, factors such as the impact on quantity, price, quality, diversification, etc, of relevant products or services shall be considered.

Impact on Other Undertakings

When assessing the impact on other undertakings, factors such as the impact on market entry, and transaction opportunities of undertakings in the same relevant market, shall be considered.

Impact on National Economic Development

When assessing the impact on national economic development, factors such as impact on the economic efficiency, economic scale, and the development of relevant industries shall be considered.

As provided by Article 15 of the AML, “relevant market” refers to the commodity coverage and territorial scope in which undertakings compete in respect of a specific commodity or service during a given period of time. Generally, “relevant market” includes both relevant product market and relevant geographic market.

The Guidelines on Market Definition further provide that “demand substitution analysis” and “supply substitution analysis” shall be applied in market definition, and that market definition shall mainly be based on the demand substitution analysis while supply substitution shall also be considered if it provides similar competitive constraints.

The Horizontal Merger Review Guidelines further clarify the approach to market definition in different types of horizontal mergers, including mergers concerning special products such as intermediate products, differentiated products, products targeting specific customer groups and regulated products.

Relevant Product Market

For the relevant product market definition, demand substitution analysis should consider factors such as:

• evidence indicating that consumers are shifting or intend to shift to purchasing other commodities due to changes in price or other competing factors;
• overall characteristics and purposes of the commodity;
• price difference among commodities; and
• sales channels of the commodity.

Supply substitution analysis should consider factors such as:

• evidence indicating the response of other undertakings in respect of the changes of competing factors such as price;
• other undertakings’ production process and technology;
• difficulties in switching to other products;
• time required for switching production;
• any extra expenses and risks incurred by such product switch;
• market competitiveness of the products manufactured after the shift; and
• marketing channels.

Relevant Geographic Market

For the relevant geographic market definition, demand substitution analysis should consider factors such as:

• evidence indicating that consumers are shifting or intend to shift to purchasing other commodities due to changes in price or other competing factors;
• the transport costs and features of transport;
• actual regions of most customers’ choice of goods;
• the restrictions set out by the relevant laws and regulations; and
• other factors such as language preferences and consumption habits of users.

Supply substitution analysis should consider factors such as:

• evidence indicating the response of other undertakings in other territories in respect of the changes of competing factors such as price; and
• the timeliness and feasibility of the supply/sales of the relevant product by other undertakings in other territories.

There is no de minimis clause based on the parties’ total sales or market size in China. However, for a horizontal concentration in which the aggregated market share of the parties is less than 15%, SAMR will normally presume the transaction does not have anti-competitive effects, unless there is evidence indicating otherwise.

Besides, if a transaction is eligible for a simplified filing procedure, it generally means that the transaction is not likely to cause significant competition concerns. With respect to the circumstances where the simplified filing procedure will be eligible, please refer to 3.8 Review Process.

While relevant precedent/case law is not binding, in practice, SAMR may refer to its previous decisions (including the precedent of its predecessor, MOFCOM) to consider how the relevant markets should be defined.

Occasionally, SAMR may refer to case law from other jurisdictions, particularly if a transaction relates to markets that SAMR has not previously examined in detail. The decisions of the European Commission are the most important in this respect. However, such decisions in other jurisdictions are for reference only, and SAMR carries out its own assessment.

As mentioned above, under the AML, a concentration may be challenged on the grounds that it has or is likely to have the effect of eliminating or restricting competition. In practice, during the merger control review, SAMR may investigate competition concerns that include the following:

Horizontal Concerns

For concentrations between undertakings active in the same markets, SAMR typically will consider the following competition concerns:

• unilateral effects, ie, whether the concentration would generate or reinforce a single undertaking’s capability, incentive and possibility to eliminate or restrict competition; and
• co-ordinated effects, ie, if the relevant market is characterised as oligopolistic (there are only limited competitors in the relevant market), SAMR may focus on whether the concentration would generate or reinforce multiple undertakings’ capability, incentive and possibility to eliminate or restrict competition in a collective way.

Vertical Concerns

For concentration between undertakings active at different levels of the supply chain, SAMR will typically consider the following competition concerns:

• foreclosure effects, ie, whether the parties to the concentration would have the incentive and ability through the concentration to foreclose competitors’ access to inputs or customers; and
• SAMR may also consider whether a vertical integration will give rise to the risk of co-ordinated effects in the relevant markets.

Conglomerate Concerns

If there are neither horizontal nor vertical mergers, SAMR will apply the conglomerate theories of harm. To address the conglomerate effect, SAMR will typically consider the following competition concerns:

• unilateral effects, ie, whether the concentration would give rise to the limiting or foreclosing of competition through tying or bundling strategies; and
• co-ordinated effects, ie, whether the concentration could facilitate collusive outcomes by reducing the number of effective competitors.

Economic efficiency is one of the factors that SAMR considers when assessing the impact of the concentration. Article 34 of the AML provides that SAMR may approve a concentration with anti-competitive effects if the parties prove that the concentration will generate pro-competitive efficiencies that significantly outweigh its anti-competitive effects.

In general, economic efficiencies must (i) benefit consumers; (ii) be merger-specific and (iii) be verifiable. The notifying parties must provide relevant information and evidence on the possible efficiencies that can be achieved, the time required, quantification, the level of the resulting benefit to consumers, and whether such efficiencies can be achieved without the concentration.

As of the time of writing, there are no precedents regarding how SAMR assesses or gives weight to economic efficiencies.

During the merger review, SAMR will mainly consider whether the transaction would have substantial competition concerns. Nevertheless, merger control reviews can also extend to non-competition factors such as national security, industrial policy, etc.

As provided by Article 8 of the AML, the state must protect the legitimate operation of undertakings engaged in the industries that are vital to the national economy and national security where mainly state-owned enterprises are active. In addition, as provided by Article 37 of the Provisions on Concentration Review, factors such as public interest and whether the merging parties are failing companies shall also be considered when assessing the impact of a concentration on competition.

For example, in practice, for transactions that involve products on which the Chinese market and customers are relatively dependent, especially where input foreclosure is likely to occur, or where the concentration may enhance the ability and incentive of competitors in the relevant markets to co-ordinate on price, SAMR may impose the remedy of continuing to supply relevant products to the Chinese market on FRAND conditions. This is evidenced in the various cases granted conditional clearance by SAMR. For example, in the SK Hynix/Intel case, SAMR required the merged entity to continue to supply all products to the Chinese market under the FRAND principle as it considered that the transaction would enhance the market concentration of the SATA enterprise-class SSDs market and the PCIe enterprise-class SSDs market while enhancing the market power of the merged entity and adversely affecting the supply to the Chinese market.

In addition, when it comes to complex transactions involving strategically important and sensitive sectors, SAMR is inclined to take a more interventionist approach. For example, in the Qualcomm/NXP case, although factors such as the lengthy reviewing time overlapped with the China-US trade war and transaction-specific concerns about impacts on the semiconductor industry may have added some complications to this case review, we also saw that Chinese stakeholders consistently complained that the transaction would expand Qualcomm’s patent licensing business into mobile payment and autonomous driving areas and that the remedies the parties offered to the European Commission would not be sufficient to address competition concerns in China. The Qualcomm/NXP case may be indicative of the broader policy considerations of SAMR in China to ensure that domestic companies have access to intellectual property rights or other inputs on reasonable terms.

Per Article 37 of the AML, concentration of undertakings in sectors that significantly impact the national economy and people’s livelihood would be under more rigorous scrutiny. The internet, finance, technology and media are generally considered as key industry sectors. In practice, transactions within these key sectors are likely to undergo more rigorous and meticulous review processes by SAMR.

There are no express provisions under the AML providing for any special considerations for joint ventures, but SAMR may particularly focus on whether there is potential co-ordination between the joint venture parents and whether there are non-competition arrangements between joint venture parents and between the parents and the joint venture. For example, in the conditionally approved case of the establishment of a joint venture (JV) between Zhejiang Garden Biochemical High-Tech (ZGBH) and Royal DSM (DSM), SAMR paid special attention to the potential co-ordination between the joint venture parents from the exchange of competitively sensitive information through the JV. ZGBH and DSM are the top two competitors for animal use of vitamin D3 both globally and in China, with a combined market share of more than 50%. Through the transaction, ZGBH and DSM proposed to establish the JV to produce DHC (the core material for making vitamin D3 for animal and human use), while ZGBH and DSM would purchase DHC from the JV for the production of vitamin D3 for animal and human use. The behavioural commitment accepted by SAMR in this case included: (i) holding separate the parties’ business activities except for DHC, thereby ensuring continued competition in the vitamin D3 markets; (ii) establishing firewalls concerning the operational activities of the JV, which would prevent ZGBH and DSM from exchanging competitively sensitive information via the JV; (iii) limiting the JV’s activities strictly to the production of DHC; and (iv) prohibiting ZGBH, DSM and the JV from disclosing the prices of cholesterol and vitamin D3 to third parties unless mandated by a client, governmental authorities or applicable law.

Under the AML, a concentration may not be implemented until a clearance is obtained. If SAMR concludes that the concentration of undertakings has or may have anti-competitive effects, it may render a decision prohibiting the concentration or imposing restrictive conditions.

Decisions not to approve or to conditionally approve are published on SAMR’s official website.

When SAMR has competition concerns about a transaction, it will inform the parties of its concerns and require them to provide remedy proposals within a specified timeframe. The parties may then propose structural and/or behavioural remedies to SAMR.

Remedies typically used in practice include:

• structural conditions such as divestiture of tangible assets, intangible assets including intellectual property rights, data, or relevant rights and interests;
• behavioural conditions such as providing access to infrastructure including networks or platforms, licensing key technologies (including patents, know-how or other intellectual property), terminating exclusive agreements, modifying platform rules or algorithms, offering compatibility or not reducing the interoperability level;

• a “hold separate” condition, which is a rather unique approach employed by SAMR in some cases where the acquired business is required to remain independent for a certain length of time after the merger; while the “hold separate” condition may be categorised as behavioural, SAMR has publicly expressed that this condition was intended to achieve similar effects as structural conditions; and

• comprehensive conditions, combining both structural conditions and behavioural conditions.

There are no express provisions within the AML or its accompanying regulations providing for whether remedies are required to address non-competition issues. However, in the Korean Air/Asiana Airlines case, SAMR imposed a restrictive condition that the parties must take reasonable and necessary data protection measures and establish a data protection system when the acquired entity withdraws from and changes the relevant airline alliance, reflecting the authority’s concerns about data. Therefore, we understand that SAMR may require the parties to resolve non-competition issues prior to clearance.

According to Article 39 of the Provisions on Concentration Review, SAMR shall evaluate the effectiveness, feasibility and timeliness of the remedies. If the remedies can effectively reduce the adverse effects of the concentration on competition, SAMR may decide to approve the concentration with restrictive conditions. Otherwise, the remedies will be deemed unacceptable and SAMR can decide to prohibit the concentration.

Parties may propose remedies either before or after SAMR informs the parties that the concentration has or may have anti-competitive effects.

SAMR may propose remedies to the parties, but it cannot force them to accept. SAMR will evaluate the remedies proposed by the parties and inform them of the result. Only when the parties and SAMR agree on the proposed remedies can such remedies be imposed on the transaction’s approval.

Parties can voluntarily propose remedies to and negotiate with SAMR at any stage of the review process, including Phase I, Phase II and Phase III. Parties can also propose remedies if SAMR raises competition concerns in Phase II. In practice, the negotiation of the proposed remedies between SAMR and the parties usually occurs in Phase III.

According to Article 38 of the Provisions on Concentration Review, during the review process, SAMR may inform the parties of competition concerns and ask the parties to submit a written remedy proposal within a specified timeframe. SAMR may solicit public opinions on the remedy proposal from government authorities, industry associations and consumers before it publicly announces the decision. SAMR may require the parties to entrust a trustee to supervise the implementation of the remedies.

With respect to the timing of divestitures, the parties are required to complete the divestiture within the timeframe specified by SAMR or, where no timeframe has been specified, within six months from the date on which the decision is made. In case of behavioural remedies, the parties are normally required to comply with the remedies for five to ten years.

Normally, parties can complete the transaction before the remedies are complied with. However, before the completion of the divestiture, the parties are subject to the following obligations to ensure the continuity, competitiveness and marketability of the divested business:

• keeping the divested business independent of the reserved business and managing in the best interest of the divested business;
• not committing any act that may have an adverse impact on the divested business, including employing key staff of the divested business, or obtaining the trade secrets or other confidential information of the divested business;
• designating a special manager to manage the divested business;
• ensuring potential buyers have access to sufficient information about the divested business in a fair and reasonable manner so as to evaluate the value and commercial potential of the divested business;
• providing necessary support as requested by the buyer to ensure the smooth takeover and stable operation of the divested business; and
• handing over the divested business to the buyer and performing relevant legal procedures.

If the parties fail to perform their obligations under the remedies, SAMR may ask them to make corrections within a specified timeframe. In serious cases, SAMR may impose the following sanctions on the parties:

• an order to cease implementing the concentration;
• an order to dispose of the shares or assets within a specified period of time, transfer the business within a specified period of time and take other necessary measures to restore the status quo ante; and/or
• a fine of up to 10% of the party’s sales revenue in the last financial year.

A formal decision permitting or prohibiting the transaction will be issued to the parties to the concentration by SAMR.

The decision will be published to a certain degree. For both the simplified and normal procedures, SAMR will publish a list of cases granted clearance on a weekly basis including the name of the transaction, the parties to the concentration and the date of approval. For prohibited cases or cases granted conditional clearance, SAMR will publish a detailed decision including the review timetable, the competition analysis employed by SAMR and the remedies imposed. Confidential information will be redacted.

For strictly foreign-to-foreign transactions with no impact on the Chinese market, it is less likely for SAMR to impose a prohibition or remedies. However, for global deals involving foreign parties, if such transaction would have anti-competitive effects in China, SAMR may impose a prohibition or remedies. For instance, in 2023 and 2024, SAMR imposed remedies on three foreign-to-foreign transactions, namely in the cases of MaxLinear/Silicon Motion, Broadcom/VMware and JX Metals/Tatsuta.       

Neither the AML nor its accompanying regulations makes express provisions regarding ancillary restraints. In practice, ancillary restraints do not require a separate filing. However, the parties would need to disclose a co-operation agreement or any other ancillary business arrangement between them in the filing form.

Pursuant to the Provisions on Concentration Review, third parties may be involved in the review process to voice their opinions in the following ways:

• SAMR may solicit opinions from the relevant government authorities, industry associations, undertakings, consumers, experts, scholars and other entities or individuals by means of written solicitations, symposiums, demonstration meetings, questionnaires, consultations, on-site surveys, etc; and
• SAMR may, on its own initiative or in response to a request from relevant parties, decide to convene hearings; participants in these hearings may include parties to the concentration, competitors, representatives of upstream and downstream undertakings, experts, representatives of industry associations, representatives of government authorities and consumers.

For simple cases during the public notice period, third parties may submit written opinions to SAMR as to whether the simplified procedure should be applied to the case in question, and provide relevant evidence and contact information.

SAMR may solicit opinions from third parties at its discretion. This is more common when cases are filed under the normal procedure. This may take the form of written solicitations, symposiums, demonstration meetings, questionnaires, consultations, on-site surveys, etc. SAMR will evaluate the effectiveness, feasibility and timeliness of the remedies offered by the parties. In its evaluation, SAMR may carry out market tests to solicit opinions from third parties on the proposed remedies. If SAMR deems that the remedies offered would not reduce the adverse effect of the concentration on competition sufficiently, it may negotiate with the parties in respect of the remedies and request them to submit other remedy proposals.

The notification form and relevant supporting documents will not be disclosed to the public. For cases reviewed under the simplified procedure, once formally accepted, there will be a ten-day public notice period, during which SAMR will release a public announcement form on its official website. The publication form includes the name of the transaction, the parties to the concentration, a basic description of the transaction, the main business and ultimate controller(s) of the parties, the reasons for applying simplified procedures, market definition and the range of market shares.

For both the simplified and normal procedures, SAMR will publish a list of cases granted clearance in the next quarter including the name of the transaction, the parties to the concentration and the date of approval.

For prohibited or conditionally approved cases, SAMR will publish a detailed decision including the review timetable, the competition analysis employed by SAMR and the supplementary conditions, and the confidential information will be redacted.

For cases under the normal procedure, the notifying parties may submit a public version and a confidential version of the notification documents and materials, and request that trade secrets or other commercial information be kept confidential.

SAMR may co-operate with its counterparts in other jurisdictions. Since its establishment, SAMR has entered into memorandums of understanding (MOUs) or co-operative agreements with various jurisdictions including the European Union, the Philippines, Belarus, Serbia, Russia, Japan, Korea and the Republic of Seychelles. For example, in October 2023 and March 2024, the Competition Policy and Co-ordination Division of SAMR and the European Commission Directorate-General for Competition co-organised the 26th and 27th China-EU Competition Week. The Competition Week focused on topics such as the internal review mechanism of merger filings, antitrust regulation in the digital economy, foreign subsidy regulation, etc.

SAMR may share information with the competition authorities in other jurisdictions. Note that, in practice, SAMR will monitor the progress of the merger control review with other jurisdictions very closely in the context of multi-jurisdictional filings.

In specific cases, SAMR may ask the notifying parties to grant a waiver so that it can discuss the non-confidential aspects of a transaction with other competition authorities.

According to Article 65 of the AML, where the parties are dissatisfied with a decision (in respect of concentrations) made by SAMR, they may appeal to SAMR for an administrative review. Where the parties are still not satisfied with the administrative review, they may bring an administrative action before the intermediate court at the location of SAMR.

In March 2025, the Beijing Intellectual Property Court issued a landmark ruling on Tobishi v SAMR (with Simcere as the third party) – the first case in which a notifying party challenged a merger decision by SAMR through judicial proceedings.

The Simcere/Tobishi case also marks the first below-threshold transaction approved with restrictive conditions in China. Tobishi is the sole manufacturer of batroxobin injections in China, while Simcere is the sole distributor of batroxobin API in China and was also developing batroxobin injections, making it a potential entrant to the relevant market. After receiving voluntary filings from both Simcere and Tobishi, SAMR conditionally approved the transaction with several restrictive conditions such as terminating the exclusive supply agreement between Simcere and DSM for batroxobin API in China, and divestiture of Simcere’s batroxobin injections business which it had been developing. Tobishi subsequently filed a request for administrative review, but SAMR upheld the conditional approval decision. In March 2024, Tobishi brought the case before the Court and the Court once again upheld the validity of the conditional approval decision. As no appeal was filed, the court ruling is now effective.

To appeal a decision, the parties need to first apply for an administrative review with SAMR within 60 days from the date they receive the official decision issued by SAMR. If the parties are not satisfied with the result of the administrative review, they may file for administrative litigation within 15 days after receipt of the result of the administrative review.

We are not aware of any successful appeals in practice.

Stakeholders to the decisions have the right to bring an administrative action to challenge SAMR’s decisions before the competent court.

We are not aware of any successful actions in practice.

In addition to the merger control regime, foreign investments into certain business sectors would be subject to NSR.

Foreign Subsidy

In China, we do not have a separate filing procedure to review foreign subsidies before the implementation of the transaction. However, the Horizontal Merger Review Guidelines provide that antitrust enforcement authorities may request parties to the transaction to provide information on the governmental subsidies received when there is evidence indicating that governmental subsidies may raise competition concerns.

In addition, the Anti-Subsidy Regulations of the People’s Republic of China also regulate relevant issues, stipulating that the Trade Remedy Investigation Bureau under MOFCOM has the jurisdiction to investigate relevant conducts if subsidies granted by foreign governmental authorities have resulted in substantial harm or threat to domestic industries.

NSR Regime

According to FIL and the NSR Measures, foreign investments falling into the following categories shall be subject to an NSR review:

• investments in military industry, fields supporting the military industry and other fields relating to the security of national defence, and investments in areas surrounding military facilities and military industry facilities; and
• a foreign investor acquiring control over important agricultural products, important energy and resources, important equipment manufacturing, important infrastructure, important transport services, important cultural products and services, important information technology and internet products and services, important financial services, key technologies and other important fields relating to national security.

For the above-mentioned foreign investments, foreign investors shall submit the NSR filing to the NSR working mechanism office established by the State Council (“NSR Office”) prior to implementation of the transaction.

For the purpose of NSR, the term “foreign investment” refers to investment activities carried out by foreign investors directly or indirectly within China, including the following circumstances:

• where foreign investors invest, solely or jointly with other investors, in new projects or in establishing enterprises in China;
• where foreign investors acquire equity or assets of domestic enterprises by way of merger or acquisition; or
• where foreign investors make investments in China in any other form.

For these foreign investments, foreign investors must submit the NSR filing to the NSR Office prior to the implementation of the transaction.