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China fights against SOE monopolies

By Hao Zhou (chinadaily.com.cn)
Updated: 2007-06-25 14:18

In the second draft of the Anti-monopolyLaw, to be discussed by the Standing Committee of the National People's Congress (NPC) today, there are added articles forbidding large State-owned enterprises (SOEs) from harming the consumers' interests through monopolies.

In comments on the first draft, some NPC delegates proposed that the country should protect legal market activities of enterprises that play a major role in the national economy and security. And at the same time, their products and services prices need to be strictly supervised and regulated in accordance with existing laws and regulations such as the Prices Law and the Laws on Protecting Consumers' Rights and Interests.

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The above suggestions were taken into consideration in the second draft of the Anti-monopoly Law, which says the above mentioned enterprises "should be faithfully honest and self-disciplined, subject to supervision by the government and the public, and they are not allowed to take advantage of their monopoly position by harming consumer's rights and interests."

Many other countries' anti-monopoly laws allow enterprises to acquire dominant positions in the market, but prevent those illegal activities from hedging others' legal rights and interests. In the general principles of second draft of the Anti-monopoly Law, a clause was added saying "those dominant enterprises should not abuse their dominant position to exclude or limit competition".