Draft Anti-Monopoly Law Approved

Related entries: Business Issues, General, Investment, Risk & Law

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. …

4 Responses to “Draft Anti-Monopoly Law Approved”

  1. Archive » Counting on “National Champions”| China Business Blog Says:

    […] « Conference on Sport in China: C-Zone London. July 11th, 2006 Draft Anti-Monopoly Law Approved » June 8, 2006 Counting on “Nationa […]

  2. Archive » Wal-Mart Stonewalls on Unions| China Business Blog Says:

    […] watch, and joins the ranks of “malicious foreign investor” stories, together with the proposed anti-monopoly law, promotion of “national champions” in the accounting sector, and […]

  3. Archive » Foreign Companies Lead in China but a Chinese Company leads the World| China Business Blog Says:

    […] cently on the roles of foreign investment and foreign companies in China, and the need for anti-monopoly measures and other restrictions. This is partly a result of nationalist protectio […]

  4. Archive » Anti-Monopoly Law Interview on Bloomberg TV| China Business Blog Says:

    […] 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 ar […]

Leave a Reply

You must be logged in to post a comment.