Mergers and acquisitions (M&A) of domestic companies by foreign investors will be reviewed for national security purposes, the Ministry of Commerce said in a new regulation.

The reviews will involve foreign mergers and acquisitions of domestic enterprises operating in security-related sectors such as agriculture, energy and resources, infrastructure and military manufacturing.

The regulation will take effect from Sept 1. The implementation of the regulation will include foreign M&A in the Chinese law system and add to the costs of foreign M&A, especially the time costs, the Beijing Times quoted analysts as saying.

By Sun Yuanqing