(By You Yunting) Abstract: The Foreign Investment Law (Draft for Comments) has shifted the standard of a company based upon the actual controller, instead of the shareholder of the company, and regulated that the domestic company must not engage in any industries where operation by foreign investors is prohibited. In case the Draft becomes law, it will cut off the survival basis of VIE structure, so that the VIE company controlled by foreign investors cannot be operated, that the overseas listed company controlled through the VIE structure by Chinese will lose its survival basis of oversea listing, and that the startup companies of VIE structure controlled by Chinese will be forced to abandon the VIE structure.
Abstract: The merger between Youku and Tudou has drawn wide attention of the medias. Someone event quoted the relevant administrative regulation to demand the initiation of the anti-trust investigation. Well, I hold the different opinion against it. It’s actually infeasible to take a monopoly status in China of private company in China, and to my opinion, the merger and acquisition by private sector shall be permitted by law and exempted from the investigation of anti-trust, which is complying with the purpose of legislature as well as the value orientation of the current phrase.