While China is busy building “national champions” (see here) with the left hand, it is also fighting unfair competition – the draft anti-monopoly law has just been approved – with the right.
The Seattle Post notes
- ”The proposed law bans monopolistic agreements, such as price-fixing and other forms of collusion, and provides for investigation and prosecution of monopolistic practices. Foreign business groups have expressed concern that it might be used to restrict or interfere with their investments” but it “will not be used to target foreign businesses” according to an official source.”
The draft law was not immediately available. But according to the official newspaper China Daily, it defines “monopoly” as a single operator controlling half or more of an industry’s overall market share, or two operators colluding to hold two-thirds of total market share or three holding three-quarters…The law also targets regional trade barriers, set up to protect local industries from outside competition, it said.”
Despite these assurances, and with “malicious foreign investors” still fresh in our minds (see here) , it is clear that there is an element of protectionism (it happens in the US and EU, so why not in China too!). A Xinhua report noted that the law would help protect local firms from foreign companies’ M&A activities, and from competition in areas like electronics, the auto sector, and in chemicals.
We will see how this one runs.
See news source:
China Cabinet OKs draft anti-monopoly law
Seattle Post Intelligencer – USA
SHANGHAI, China — China’s Cabinet has endorsed a draft anti-monopoly law aimed at boosting fair competition after decades of domination by state industry. …