Issue Note China Interagency Review

by Dr. Cheng Bian, CELIS Assisstant Country Reporter for China.

Since January 2021, a ‘Working Mechanism’ has been established as the successor of the ‘Joint Ministerial Conference’, and is the official review agency of China’s national security review regime. The Working Mechanism is an inter-ministerial agency led by the National Development and Reform Commission and the Ministry of Commerce, which coordinate and undertake investment screening and impose sanctions on non-compliance of investors. Other authorities may be involved on a case-by-case basis, however the composition of the Working Mechanism for a specific transaction largely depends on which sector the acquirer and target are concerned. There is no indication that the Working Mechanism would consult or cooperate with authorities of foreign jurisdictions, and there is no statutory procedure governing the consultation and cooperation mechanism. The investors’ level of involvement during a review or influence to the proceedings and outcome also remain unknow.