September 1, 2015
Reshaping China’s Global Economy: The Critical Role of CFIUS Proceedings
Between 2010 and 2012, the number of Chinese corporation filings with the Committee on Foreign Investment (CFIUS) increased by nearly four hundred percent, with the total value of these proposed acquisitions jumping to over $10 billion. For the first time in history, Chinese entities were the top CFIUS filers, beating out the UK, France, and Canada.
While Chinese companies maintain a strong interest in investing in the U.S., there is still doubt that the investment is entirely welcome. These feelings are founded in the CFIUS process—a review of inbound foreign investments by the inter-agency committee for national security concerns, which requires deal parties to mitigate concerns. If issues remain, the CFIUS also has the ability to block proposed transactions, thus giving the agency strong influence on the transactions and on the major shifts in global markets.
That said, CFIUS’ relationship with Chinese companies has never been more critical. China’s ever-rising economy is increasingly affecting the global economy, through both trade and, more recently, direct investment.
Now, China seeks to transform and globally integrate its economy through the acquisition of enhanced capabilities, beginning with cross-border mergers and acquisitions. The following article outlines the challenges, misperceptions and risks linked to inbound Chinese investment, along with actions to better understand and influence the political thinking and policy framework behind CFIUS review proceedings.
Click here to read the white paper: Chinese Deals Under the Microscope