The draft of the first Chinese Anti-Monopoly (AM) Law has recently been submitted to the Standing Committee of the National People’s Congress (NPC) where the draft will be reviewed and commented several times before the final enactment. The current Chinese anti-competition (anti-trust) regime is not comprehensive and rather fragmented into several different statutes, such as Price Law and Anti-Unfair Competition Law. For a more effective administration and enforcement in this area, especially in the course of its active transition to the market economy, the Chinese government wrote the first AM draft in 1994. Ever since, both Western governments and business organizations have frequently commented on the draft. Understandably, they have tried to persuade the Chinese government to emulate their time-honored anti-competition (anti-trust) policies. In fact, it would serve the interests of the Chinese government to modernize its economic governance by incorporating these advanced foreign anti-competition policies.
Yet, the Chinese government and the Western observers have recently revealed somewhat different “fears” with regard to the rationale of enacting the AM Law. The Chinese government seems to fear that large foreign multinationals would invade the Chinese market, abuse their dominant positions, exploit Chinese consumers and wipe out small indigenous businesses. In contrast, Western governments and businesses seem to fear that the Chinese government might use the new AM Law to check and block foreigners’ access to the lucrative Chinese market as well as justify the government’s heavy market intervention. In the same vein, they might fear that China would use the AM Law as a shield against mounting foreign pressure to enforce its intellectual property rights. Article 48 of the draft which illegalizes any abuse of intellectual property rights is reminiscent of the recent Microsoft anti-competition case in Europe.
For those who are interested in this issue, here is a web link to an interesting event (The U.S.-China Legal Exchange) held in the December 8, 2006, in Washington, DC, hosted by the U.S. Department of Commerce, and supported by the U.S. Chamber of Commerce.
