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Anti-monopoly law commission in force

By Diao Ying (China Daily)
Updated: 2008-07-16 07:14

Several government agencies, rather than a single body, will be responsible for enforcing the country's first anti-monopoly law, according to sources familiar with the case.

The long-awaited landmark antitrust legislation, proposed 15 years ago and passed only last year, takes effect from Aug 1.

As the law's primary goal is to encourage fair competition, it is seen by investors and legal experts as a main component of China's market economy constitution.

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Three government bodies - the commerce ministry, the central planning agency National Development and Reform Commission (NDRC) and State Administration for Industry and Commerce (SAIC) - will enforce the law, according to the source close to the law - making process.

The law decided upon an anti-monopoly committee directly under the State Council when passed last year but did not say who would enforce it.

Many government bodies are involved in shaping the anti-monopoly process, said Li Shuguang, a professor at China University of Politics and Law, who participated in drafting the law.

Financial administrations and agricultural administrations could all be involved in the process of determining unfair competition and monopoly, according to Li.

Li said the law, therefore, is good news for foreign investors. They now know which department to apply to when they make a decision.

"Before, they did not know the investment risks, but now, the responsibility of each department is relatively clear, so they know to whom they should appeal, " said Li.

Under the new structure, the commerce minister will be in charge of anti-monopoly investigation of issues such as mergers and acquisitions; the NDRC will decide upon price issues and SAIC will decide issues related to the abuse of dominate positions.

Despite these positive signs, experts think it is a law in transition and that much needs to be done to make enforcement more efficient.

The anti-monopoly committee could coordinate different parties, but it is not a professional law enforcement body, according to Huang Yong, a professor of University of International Business and Economics.

Huang said the current mode would challenge enforcement bodies. "The main question is: who will be in charge?"

Huang also suggested these bodies work together in the process.