Challenges in Implementing China’s Antimonopoly Law

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Jun Wei, Aug 11, 2008

After 13 years of preparation and debate, the final adoption of the Antimonopoly Law of the People’s Republic of China marks an important move by China toward an effective competition regime, and also a significant moment in China’s legislative history. The implementation of China’s AML, which became effective on August 1, 2008, will have significant implications on the investment and business operations of foreign companies in China. On the one hand, the AML may assist foreign investors by providing uniform and comprehensive guidelines on competition in the Chinese market. On the other hand, the AML may also restrict the existing business practices of multinational companies or even subject them to harsh penalties. In general, the main outline of the AML is similar to that of antimonopoly laws in other countries, as the AML Drafting Committee conducted extensive studies of foreign antimonopoly laws and undertook numerous discussions with foreign experts. Despite its foreign influence, China’s new AML maintains some “Chinese-specific” provisions in accordance with the current Chinese economic and social environment. Minding the AML, investors interested in the Chinese market should pay special attention to the competitive impact of their proposed deals, even for transactions outside of China given the AML’s extraterritorial application. This article will discuss certain challenges in implementing the AML given ambiguities and uncertainties that call for special attention.

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