Cabinet okays draft anti-monopoly law
By Hu Yuanyuan (China Daily)
Updated: 2006-06-08 08:46 The report lists a number of industries where free competition may be
threatened by multinationals, including software, photosensitive material,
mobile phones, cameras, tyres and soft packaging.
"Though the law may
not be to the advantage of multinational companies, China needs a comprehensive
and enforced set of competition laws to become a fully developed economy," said
Wang, adding that China is still very supportive of overseas investment.
Chinese enterprises, too, face problems.
"To some extent,
Chinese enterprises are more vulnerable to the anti-monopoly law, given their
relative lack of experience in this aspect," Wu Xiaochen, a lawyer with Seafront
Law Office, told China Daily.
For instance, it is common practice for
some leading enterprises or industry associations to agree on pricing, which is
typical monopoly behaviour, Wu explains.
"And they will have to think
twice when taking over other companies after the law is enforced," Wu
added.
According to the draft, companies seeking mergers or acquisitions
will have to notify the authorities if one or more of the parties involved has a
turnover of 1.5 billion yuan (US$185 million) or more.
Anti-trust
legislation is regarded as a basic requirement of the market economy in
developed economies.
China started work on the law in 1994; and the first
draft was completed in 2003.
(For more biz stories, please visit Industry Updates)
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