According to the data collected, since 1990s, the global M & A cases are increasing at a rate of 42% per year, which is equal to 11% of the World GDP. In 2004, the transnational M & A cases grew by 28%, and worth 381 billion US dollars. At the same time, China''s oil, mining, automobile, computer manufacturers/enterprises have also gone out of the country in recent years to invest,　to hold stocks of and even acquire overseas enterprises （particularly in year 2008, the oil and mining companies displayed a good performance in the overseas investment in mergers and acquisitions. For instances, Chalco has inserted 19.5 billion U.S. dollars to become one of the shareholders of Rio Tinto, and the Minerals and Valin have completed overseas M & A as well）. Transnational investment has become a big trend. The time of China''s accession to the WTO is also when the fifth global acquisition took place, which is characterized by transnational mergers and acquisitions. China''s economy gets further involved into the world market. Then a large scale of foreign capital enters China, resulting in lots of transnational acquisitions in China, for example, Carlyle has acquired Xugong, Johnson & Johnson has acquired Dabao, just to name a few. Some very famous domestic brands, such as Meijiajing, Zhonghua, Lebaishi and Xiaohushi even got disappeared after the acquisition, so Chinese people are quite worried about the transnational acquisitions. Therefore, foreign mergers and acquisitions have attracted great attention of the Chinese society. People not only feel wary of mergers and acquisitions of the foreign corporations, but also have doubts on our government''s too loose control of mergers and acquisitions. At the same time, in the international financial crisis, the trade protectionism in major countries like the United States and Europe has been in a rise, and the distrust and precaution between countries tend to uplift. The case of Huiyuan acquisition causing such a huge response both in domestic and international world is closely related to this unqiue international background.

　　2．The Dual Impact of Foreign M & A on The Chinese Market

　　The duality of the impact of foreign M & A on the Chinese market manifests in two aspects：

　　In the first place，the foreign M & A, as a kind of M & A, has its fundamental characteristics, that is to say, acquisition is a double-edged sword to the competition. Dated from the time of Adam Smith, hundreds of years'' practice has repeatedly proven that the market competition is the best means of social resource allocation. This has been regarded as a supreme axiom in the effective functioning of market economy. On one hand, the foreign M & A can have positive effect on the market competition, for example, the acquiring company acquires a target company that is in difficult situation, or it forms effective competitions by way of merging with other domestic companies; the foreign M & A can also challenge the established monopoly of domestic enterprises. On the other hand, the foreign M & A can be used to weaken or restrict competition, and can make the economy power over-concentrated, which may easily create a monopoly market structure, and even worse, it may endanger the national security.

　　Secondly, foreign M & A has dual impacts on the development of national economy as well. China has introduced the advanced technology and managerial experience through the introduction of foreign capital, which has promoted the economic system transformation and economic development; but in the process of introducing foreign investment, especially in the foreign M & A over the past few years, problems such as excessive dependency on foreign capital, the formation of monopoly in the domestic market or elimination of national brands might be caused.

　　2.1.　The Negative Effect on The Market