Anti-Monopoly Law Interview on Bloomberg TV

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I was invited to do an interview on Bloomberg TV on Friday, and to share my views on China’s proposed anti-monopoly law (more on which can be found here). In case you were not glued to your screen, and missed it, here are some points I think are worthy of note:

    • The development of the law is in line with China’s development and transformation into a market economy on the world stage.

    • It should not be looked at as a purely protectionist / anti-foreign piece of legislation, though there are potentially protectionist elements.

    • China is not alone in using anti-trust laws. The EU recently referred the bid by China’s International Marine Container for Berg Industries for review. The Chinese pulled out as a result.

    • The anti-monopoly law may come into force after the National People’s Congress in March 2007, but regulations such as those covering foreign M&A activities are already starting to have an impact (e.g. Carlyle’s bid for Xugong).

    • The new law presents challenges to foreign companies, but also opportunities. It will provide a legal framework with more certainty, and may help challenge existing administrative monopolies. Foreign companies may also benefit from experience of dealing with anti-trust laws at home.

    • The impact of the law is hard to predict, as much will depend on definitions and interpretations (e.g. what constitutes “unfairly” priced goods).

    • Companies such as Microsoft, Kodak, Fuji, and GE may face investigations due to their dominant market positions (but anti-competitive practices would still need to be shown for any action to be taken). Local monopolies may also face investigations.

    • The introduction of the law should be seen in the context of a general policy shift towards protectionism and a re-evaluation of foreign investment in China.

    • Foreign companies should be aware of political sensitivities – especially in relation to market control in strategic areas of the economy, and in relation to leading Chinese companies and brands.

    • In terms of M&A, big deals may mean big risks. Rather than focusing on leading companies that come with political baggage, middle market companies may offer better opportunities.

One Response to “Anti-Monopoly Law Interview on Bloomberg TV”

  1. Archive » Law Drafting Goes Postal| China Business Blog Says:

    […] functions. This seems to be in line with general policy moves, and the introduction of the Anti-Monopoly Law. However, it seems that any plans for aggressive reform may have been…lost i […]

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