China may pass anti-monopoly law next week
Sunday, 26 August 2007
BEIJING, Aug 25 (Reuters): China's anti-monopoly law is likely to be passed next week, after over a decade of wrangling, but may require national security checks for foreign firms that want to buy Chinese rivals, domestic media said Saturday.
The new law prohibits use of administrative powers to disadvantage competitors, as well as banning monopoly agreements and abuse of a dominant market provision, the China Daily, the Communist Party's English-language mouthpiece said.
It gave no other details of its content.
The anti-monopoly law was drafted in 1994, but not submitted for first review until June 2006. It will finally come into effect on August 1, 2008 if passed by the standing committee of China's National People's Congress, China's parliament.
While reformers in the government have been keen to pass the anti-monopoly law, the protracted debate over the bill illustrates the power wielded by the many state monopolies and oligopolies in China.
The clause on national security checks-which may worry foreign firms already concerned about a rise in economic nationalism-was added because of the growing number of foreign mergers and acquisitions, said the China Daily said.
Those deals accounted for only 5 per cent of foreign direct investment before 2004, but by 2005 the figure had risen to around 20 per cent, the paper added.
The newspaper did not say which ministry or body would have responsibility for implementing the law, or for leading any anti-trust actions.
The new law prohibits use of administrative powers to disadvantage competitors, as well as banning monopoly agreements and abuse of a dominant market provision, the China Daily, the Communist Party's English-language mouthpiece said.
It gave no other details of its content.
The anti-monopoly law was drafted in 1994, but not submitted for first review until June 2006. It will finally come into effect on August 1, 2008 if passed by the standing committee of China's National People's Congress, China's parliament.
While reformers in the government have been keen to pass the anti-monopoly law, the protracted debate over the bill illustrates the power wielded by the many state monopolies and oligopolies in China.
The clause on national security checks-which may worry foreign firms already concerned about a rise in economic nationalism-was added because of the growing number of foreign mergers and acquisitions, said the China Daily said.
Those deals accounted for only 5 per cent of foreign direct investment before 2004, but by 2005 the figure had risen to around 20 per cent, the paper added.
The newspaper did not say which ministry or body would have responsibility for implementing the law, or for leading any anti-trust actions.