Making of anti-trust law is speeded up
By Dai Yan (China Daily)
Updated: 2004-10-27 01:14

A leading Ministry of Commerce official has revealed that China will accelerate the drafting of an anti-trust law to guarantee a fair and orderly market.

Shang Ming, head of the ministry's anti-trust office, gave a briefing on the drafting process of the law, the first since the office was set up last month.

Shang said the anti-trust law, dubbed an "economic constitution" by legal professionals, is expected to greatly improve the country's competition legislation.

Laws currently on the statute book in this regard include the Law Against Unfair Competition, the Price Law and the Law on Tendering and Bidding.

The draft anti-trust law contains articles regulating monopoly agreements, abuse of dominant market status, large-scale consolidations and administrative monopolies, said Shang, who is also the chief of the ministry's department of treaties and law.

A draft of the anti-monopoly law has been submitted to the State Council's Legislative Affairs Office and distributed to related departments and local governments for comments, he said.

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.

There are major concerns about the absence of an anti-monopoly law in China. A report by the State Administration for Industry and Commerce in May found that some multinational companies are abusing their dominant positions in order to curb competition and called for an early legislation.

Shang said one important goal of the law is to check monopolies.

But the adoption of an anti-monopoly law is not solely for the purpose of checking monopolies in the economic sphere.

In a move to rein in administrative monopolies, a major irritant for foreign companies in China, the law has devoted a special chapter to regulate government-related monopolies, Shang said.

"Administrative monopolies are a problem that more attention should be paid to in the anti-trust law," Shang said.

Administrative monopolies and local protectionism are serious in China and threaten the establishment of a national market economy.

Many local governments have a huge stake in fostering a number of local enterprises as their tax base and the source of financial revenue and have erected barriers to prevent outsiders from entering local markets.

Analysts believe Shang's remarks imply that process of legislating the anti-trust law will be accelerated.

A researcher at the Institute of Legal Studies of the Chinese Academy of Social Sciences said it is the first time the ministry has made an official comment on the drafting of the law.

The ministry is moving to be more aggressive in the sector, which indicated efforts in this regard will be intensified, said the anonymous expert.

The Ministry of Commerce set up the anti-trust office in September to improve legislation and strengthen anti-monopoly investigations.

The office, a temporary mechanism, is responsible for helping to draft the anti-monopoly law, related investigations and international communications on anti-monopoly issues.

Drafting of the anti-trust law has already lasted for a decade, but there has been numerous revisions because of controversial issues.

And the specific department responsible for the law's implementation has yet to be decided.

The Ministry of Commerce, which deals with foreign and internal trade, seems to be the most suitable authority.

But the State Administration of Industry and Commerce also has some power in this area since it oversees the implementation of the Law Against Unfair Competition, which has some anti-monopoly stipulations.

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