China’s First Anti-Monopoly Law Took Effect August 8

by Hongwei Shang on August 8, 2008

in News

China’s first anti-monopoly law took effect on Friday, viewed as a milestone of the country’s efforts in promoting a fair competition market and cracking down on monopoly activities.

The law, which was proposed 14 years ago and finally received official approval last year from the Standing Committee of the National People’s Congress, the country’s top legislature, aimed to build a uniform, open, transparent market, and to encourage fair competition, experts said.

Sheng Jiemin, a Peking University law professor, told Xinhua it had introduced some advanced concepts from America’s anti-monopoly law, which strikes at dominating enterprises’ monopolistic activities and puts safeguarding consumer rights as priority.

"It is different from other economic laws," Sheng explained. "Punishment usually comes after a long and thorough investigation and research under the anti-monopoly law."

The State Council, China’s Cabinet, said it had established an Anti- monopoly Committee earlier this week. It will research and map out relevant laws, investigate and monitor enterprises and companies, assess the competition situation in the market and cooperate with other government bodies to enforce the law.

Despite this significant improvement in the country’s economic reform and legal system, experts felt the government still had a lot to do to perfect the law and enhance its efficiency.

"There is possibility for crossing and overlay of the functions between the three law enforcement bodies," Sheng said. "It is hoped that an unified institution comes out in the coming years, which will be better in accordance with the country’s situation."

"The country currently has no better measures to solve the monopoly problem in some crucial centrally-administrated and state-owned large enterprise and industrials," said Zhang Yansheng, the NDRC’s International Economic Research Institute director.

Any activities that harm consumer rights were discouraged, Zhang added.

Three government organs, including the National Development and Reform Commission (NDRC), the Ministry of Commerce, and the State Administration for Industry and Commerce (SAIC), will enforce the law and carry out its implementation in a coordinated fashion.

The SAIC said earlier it had established an independent bureau, which was in charge of investigating and punishing unfair competition, commercial bribery, smuggling and other cases that broke relevant economic laws.

In addition, the country’s top economic regulator, the NDRC, finished a draft of the anti-price monopoly law regulation earlier this week, which was a component of the anti-monopoly law.

According to the draft, monopolizing enterprises that intended to control prices, dump their products at extremely low prices and sold products at various prices between different consumers at random, would face punishment.

"The anti-price monopoly law regulation will determine the government’s actions in cracking down on price monopoly via a legal basis," said Li Lei of the NDRC’s price supervision department.

The anti-monopoly law was not expected to shake the country’s "4S" automobile marketing mode, which features a combination of "sales, spare parts, service, and survey," market analysts said.

"Since no single automobile enterprise dominates the domestic market, there is no monopoly in this sector," said a Ministry of Commerce official who declined to be named. "The only problem is excessive competition."

Source: ChinaLawyerSearchGuide.

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