As tensions rise, China has found a subtle way to make life difficult for US tech companies: slowing down regulatory approval for acquisitions and other deals
Dan Gallagher / Wall Street Journal :
Context & Ripple Effects
This story extends a playbook Beijing has been assembling for years. As far back as 2016, US tech firms were routing themselves through joint ventures and local partners to clear Chinese regulatory hurdles; by late 2020, sources reported Beijing had sped up work on a blacklist that could punish US tech firms, with timing deliberately tied to the US election cycle.
What changed by 2023 was the instrument: rather than a formal blacklist, regulators began quietly [[a:838745|slowing merger approvals and asking some US companies to make foreign-market products available in China]]. The current report shows the same lever now applied more broadly to acquisitions and other deals — and it lands just as sources say China is compiling a [[a:882308|target list of US tech firms including Broadcom and Synopsys, whose $35B acquisition needs Beijing's approval]].
First-order effects
- US companies with pending transactions touching the Chinese market face open-ended approval timelines, and any deal requiring Beijing's sign-off — like Synopsys's $35B acquisition on the reported target list — now carries a political hold on top of a legal one.
- Firms already under scrutiny, such as Apple per the related coverage of tightened dual-use export checks, see deal-making added to export friction as a second channel of pressure.
Second-order effects
- Deal structuring shifts: acquirers carve China-exposed assets out of transaction scopes or revive the joint-venture and partner arrangements documented since 2016 specifically to avoid triggering Chinese review.
- Rival bidders and Chinese counterparties gain leverage in negotiations, since a US buyer who cannot count on timely approval must price that risk into bids or concede terms.
Third-order effects
- If the pattern holds, antitrust and investment approvals harden into a standing instrument of trade conflict — reciprocal to US export controls — making China clearance a routine line item in global M&A risk models rather than a formality.
- The cumulative effect pushes US tech firms toward structural separation between their China business and their global one, reversing two decades of operating as a single integrated market.
The trend: Regulatory approval itself is becoming a weapon in US-China tech decoupling, with each side converting its own permitting regime into retaliatory leverage.