China Wants to Strike Back on Trade. Big U.S. Deals Could Suffer.

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United Technologies said it was still on track with regulatory approvals needed for its Rockwell Collins deal. But when asked on a conference call in June whether the trade war could prevent the deal from going through, Akhil Johri, United Technology’s chief financial officer said, “That is something you always have to think about or worry about.”

Last Monday, United Technologies received a green light from regulators in the United States. “The process for closing on Rockwell Collins is moving forward with the recent U.S. Department of Justice approval being the latest milestone,” said Michele Quintaglie, a spokeswoman for United Technologies. China’s approval is the last step.

Fox and Disney executives have said in private discussions that they expect their deal to be cleared without any problems. In a regulatory filing from June, Disney listed Chinese approval as a potential hurdle that the deal would have to overcome.

Some large deals have cleared Chinese regulators despite the tensions. Earlier this year, China’s regulators approved Microchip Technology’s acquisition of Microsemi and Bain Capital’s acquisition of Toshiba’s microchip unit.

The Disney-Fox and United Technologies-Rockwell Collins deals may be less likely to attract scrutiny because they aren’t as central to Chinese business as Qualcomm. The chip maker supplied essential parts for the country’s big smartphone manufacturers.

Even before the trade war, China applied more scrutiny to foreign companies. Mergers of foreign companies in China are six times more likely to be reviewed by the authorities there than deals between two Chinese companies, according to data compiled by the Rhodium Group. Chinese regulators have unfairly focused on foreign companies, including General Motors and Microsoft in recent years, instead of domestic companies, according to Liu Xu, a researcher at the Intellectual Property and Competition Law Research Center at Tongji University in Shanghai, who has studied the cases.

It is unclear whether the Chinese authorities will scrutinize the Disney-Fox deal in particular, but experts said a deep review would be consistent with traditionally tight regulatory controls over foreign content and information.

“The party has been more interested in containing American influence in the cultural space and entertainment space,” Mr. Chen, of the Asia Global Institute, said. “Blocking such a deal would serve to keep the American influence away and also make a point to America.”

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