Illustration: Aïda Amer/Axios
All significant merger-and-acquisition transactions require regulatory approval — and a new regulator just got to town.
Why it matters: We're in a tit-for-tat trade war, which means that any action the U.S. takes against China is going to be reciprocated by a similar action taken by China against America. That includes regulatory actions.
Driving the news: The auction for TikTok began when U.S. regulators forced China's ByteDance to sell any operations in the United States.
- Soon enough, China stepped in to scuttle a potential deal with Microsoft, saying that ByteDance was not allowed to sell the TikTok algorithm to an American company.
- China also has concerns about America's Nvidia buying the U.K.'s Arm Holdings from Japan's SoftBank. The Chinese press has started reporting that Chinese regulators might seek to block the deal, which, although it has no Chinese component, could have a significant effect on Chinese electronics manufacturers.
The bottom line: Few companies would want to unnecessarily antagonize China by entering into a deal that the Chinese government opposes. That gives Chinese regulators real power. And they're starting to use it.