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Bank Mergers in China: What Role for Competition?

  • Deborah J. HEALEY (a1) and Zhang CHENYING (a2)
Abstract
Abstract

This article examines the likely role of competition in the regulatory analysis of bank mergers in China. Despite financial reforms, the banking sector remains subject to a complex web of financial regulation, with industrial policy favouring stability to facilitate national economic development. While there are currently no Ministry of Commerce (MOFCOM) bank merger determinations under the Anti-Monopoly Law (AML), examples of MOFCOM’s merger analysis in other sensitive industries diverge from a pure competition-based analysis, favouring grounds linked to national economic development broadly within the terms of the AML. Given the importance of banking to the Chinese economy, this article argues that competition is unlikely to play a large part in any assessment of bank mergers by MOFCOM, particularly where a foreign bank is involved. Instead, issues linked to ‘national economic development’ and stability are likely to play the most important role, leading to less predictable merger approval outcomes.

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LLM (Hons) (U.Syd) LLB (U.Syd); Professor, Faculty of Law, University of New South Wales (Australia). The authors wish to thank the Centre for International Finance and Regulation for the funding used to complete this research.

**

BA, LLB, LLM, PHD, Peking University; Associate Professor, Faculty of Law, Tsinghua University (China).

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This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

Deborah Healey , ‘Mergers with Conditions in China: Caution, Control or Industrial Policy’ in Colin Picker, Lisa Toohey and Jonathan Greenacre (eds), China in the International Economic Order: New Directions and Changing Paradigms (Cambridge University Press 2015)

Nicola Cetorelli and Pietro Peretto , ‘Credit quantity and credit quality: Bank competition and capital accumulation’ (2012) 147(3) Journal of Economic Theory 967

Thorsten Beck , Asli Demirguc-Kunt and Vojislav Maksimovic , ‘Bank Competition and Access to Finance: International Evidence’ (2004) 36 (3) Journal of Money, Credit, and Banking 627

Allen N Berger , Asli Demirgüç-Kunt , Ross Levine and Joseph Haubrich, ‘Bank Concentration and Competition: An Evolution in the Making’ (2004) 36(3) Journal of Money, Credit and Banking 433

Allen N Berger , Leora F Klapper and Rima Turk-Ariss , ‘Bank Competition and Financial Stability’ (2009) 35(2) Journal of Financial Services Research 99

D. Daniel Sokol , ‘What Drives Merger Control’ in Thomas K. Cheng, Ioannis Lianos and D. Daniel Sokol (eds), Competition and the State, (Stanford University Press 2014) 89

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Asian Journal of Comparative Law
  • ISSN: 2194-6078
  • EISSN: 1932-0205
  • URL: /core/journals/asian-journal-of-comparative-law
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