It is difficult to overstate the importance of concentration control regulations in the broader context of Chinese Anti-trust law as regulated by the Anti-monopoly Law of the People’s Republic of China (Anti-monopoly). No area of anti-monopoly enforcement commands closer scrutiny or arouses more impassioned debate. In fact, creating a proper definition for concentration was the most vigorously contested issue during the drafting of the new Anti-monopoly Law.

In the past, forms of concentration such as mergers, acquisitions, combinations, consolidations, and takeovers were regulated by the General Principles of Civil Law, The Company Law, The Bankruptcy Law, Explanations by the Supreme Court of China regarding Enterprise Reconstruction, and additional regulations of the Ministry of Commerce (MOFCOM). There was no official statutory definition of concentration and the applicable rules created by different regulatory bodies were unclear and not properly coordinated leaving a large gap for differing interpretations of the law.  

The most important statutory rule for concentration before the adoption of the Anti-monopoly Law was in Article 2 of the Interim Provisions on the Takeover of Domestic Enterprises by Foreign Investors. However, many legal commentators criticized the above provision as they believed its regulatory scope was too narrow and the definition of share right and asset takeover did not adequately provide for the many new emerging forms of concentration in the market.

The Chinese legal definition for merger as used in The Company Law and in other rules and regulations refers to the act of purchasing part of the equity and assets of another company; excluding many other forms of concentration such as acquisition, joint venture, strategic alliance, contractual arrangements for shared rights and obligations, and an interlocking director. Similarly, not all forms of concentration are fully encompassed within the American legal definition of Merger and Acquisition (M & A)

The word "concentration"as it is defined under European competition law may be the best model for the Anti-monopoly Law. This is because it focuses on the essential outcome of concentration activity, instead of just describing specific behavior. It also gives consistency to the law by providing a general term covering many different types of consolidations. Thus, if there are other forms of concentration in future practice, such as certain strategic alliances, joint ventures, or other agreements/undertakings between parties that cannot be categorized as a merger, acquisition, interlocking director, franchise or contractual control; it will still fit within the definition of concentration in the Anti-monopoly Law.

Article 20(3) of the Anti-monopoly Law states that concentration occurs where "a business operator acquires control over a business(s) or is able to exert a decisive influence on a business(s) by contract or any other means." This provision establishes that control may be obtained through contract or any other activity in which a business operator could exert influence on other business operators. Article 217 of the Company Law defines an "actual controller" as "anyone who is not a shareholder but is able to hold actual control over the acts of a company by means of investment relations, agreements or any other method."

It is important for the Anti-monopoly Law to properly take into account the increasingly more complex and diverse forms of concentration that are now emerging, and which will continue to be utilized in the market. By focusing on the "outcome" of concentration activities, the European model best achieves this goal.