China on Tuesday defended its regulation that reviews mergers and acquisitions (M&A) of domestic companies by foreign investors, saying it does not impose a new threshold for such practices.

The policy targets the practices that will affect national security or have the potential to be a threat, Shen Danyang, spokesman of the Ministry of Commerce said at a regular news briefing in response to foreign investors concerns over M&A of domestic firms.

The regulation, which took effect as of September 1, "does not mean a new threshold has been set up for acquisitions and mergers by foreign investors or a new recognition procedure," he said.

According to the regulation which was issued in February, the review process will involve foreign M&A of domestic military-industrial enterprises and supporting firms, companies near "major and sensitive military facilities" and other M&A that are deemed to be relevant to national security.

Shen said foreign M&A of domestic companies accounted for 3.1 percent of the foreign direct investment (FDI) that China attracted last year. From January to August this year, foreign M&A projects amounted to $3.4 billion, a big increase from past years, he added, without giving comparable figures.

Total FDI for the first eight months of this year reached $77.63 billion, the ministry said last week.

(Xinhua News Agency September 20, 2011)