Top Chinese legislators urged that an anti-monopoly law should be
created to break administrative monopolies and prevent
multinational industrial giants from dominating the home market.
"If we fail to curb monopolies, the healthy development of the
market economy will be undermined," warned Peng Fusheng, a National
People's Congress (NPC) deputy from Chongqing Municipality.
Wei Wenlin, also a NPC deputy and a professor at Tsinghua
University, also believed that the early introduction of such a law
is vital especially with China's entry into the World Trade Organization (WTO).
"After China's WTO entry, new monopolies by foreign rivals may
emerge, which call for prompt promulgation of such a law to protect
the interests of domestic companies," said Wei.
Dai Qi, along with 34 fellow deputies, raised a similar proposal
which said the law is indispensable in combating anti-dumping and
monopolies and defending the nation's industries and consumer
interests with China's further integration into the global
market.
At
present, there are three kinds of monopolies in China, industry
monopoly, administrative monopoly such as the postal service and
railways, and economic monopoly in the form of price cartels, or
self-regulated prices.
Wei is optimistic that administrative monopolies, a remnant of
China's planned economy, will be phased out in the near future as
the government has already started the process.
China Telecom's
monopoly ended with the launches of China Unicom, China
Mobile and China Railcom in
the past few years. As a result, a competitive environment has
taken shape with three operators in the fixed-line business and two
in the mobile sector.
In
the power sector, a reform package is under way to split electric
power supplies from power grid operators.
But what concerns Wei the most is that without appropriate
anti-monopoly legislation, foreign firms may muscle in.
He
warned there is a great possibility that foreign conglomerates with
technical know-how, efficient management and ample capital can
become monopoly powers in China's home market.
At
present, most Chinese business entities are still small and weak.
Even some large industrial companies, which might be perceived as
monopolies in China, are relatively small when put in the context
of the global market, he said.
Among the Fortune global 500 list released last July, only 12
Chinese firms were listed.
Which is why Wei believes careful investigation is needed before
splitting administrative monopolies.
"To end an administrative monopoly, the simple break-up approach
may not be a wise choice," emphasized Wei. "Instead, the key lies
in separating the enterprises from administrative organs and
transforming them into real and proactive players on the
market."
Qi
Yudong, a professor with the Capital University of Economy and
Business echoed his view.
"It is necessary to firmly deal with monopoly practices such as
price cartels or collusion," said Qi.
(China
Daily March 16, 2002)