Shang Ming, head of the Ministry of Commerce's new
antitrust office, said at a Wednesday press conference that the
antitrust law now being drafted will help to guarantee a fair and
orderly market.
Shang, who is also the chief of the ministry's department of
treaties and law, said the new legislation -- dubbed an "economic
constitution" by legal professionals -- is expected to improve the
country's competition legislation substantially.
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Laws currently on the books include the Law Against Unfair
Competition, the Price Law and the Law on Tendering and
Bidding.
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The draft antitrust law contains articles regulating monopoly
agreements, abuse of dominant market status, large-scale
consolidations and administrative monopolies. The draft has been
submitted to the State Council's Legislative Affairs Office and
distributed to various departments and local governments for
comments, said Shang.
The law is on the legislative agenda of the 10th National
People's Congress, whose tenure ends in 2008, but the draft
requires further revision.
Concerns about the absence of an antitrust law are widespread. A
report by the State Administration for Industry and Commerce in May
indicated that some multinational companies are abusing their
dominant positions in order to eliminate competition.
Shang said that the adoption of an antitrust law is not solely
for the purpose of checking business monopolies: administrative
monopolies, a major irritant for foreign companies in China, must
also be reined in. A special chapter in the law is devoted to
regulation of government-related monopolies.
Administrative monopolies and local protectionism are serious
problems in China and threaten the establishment of a national
market economy.
Local governments have a huge stake in fostering local
enterprises, their main sources of tax and other revenue. Many have
erected barriers that keep outsiders from entering local
markets.
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A researcher at the Institute of Legal Studies of the Chinese
Academy of Social Sciences indicated that Shang's press conference
was notable as the first official statement by the Ministry of
Commerce on the drafting of the law.
The ministry set up the antitrust office in September to improve
legislation and strengthen investigations.
The office, a temporary mechanism, is responsible for helping to
draft the law, conducting investigations and discussing
antimonopoly issues with international bodies and
representatives.
The drafting of the antitrust law has dragged on for a decade,
slowed by controversial issues and numerous revisions.
The specific department to be responsible for the law's
implementation has yet to be decided. The Ministry of Commerce may
be the most suitable authority, but the State Administration of
Industry and Commerce also has a stake since it oversees the
implementation of the Law Against Unfair Competition.
(China Daily October 28, 2004)
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