China’s Antimonopoly Law: Status Quo and Outlook

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Michael Han, Jessica Su, Aug 11, 2008

As the pillar of Chinese competition law and policy, the Antimonopoly Law of the People’s Republic of China has been on the legislative agenda since 1994. The AML was eventually enacted on August 30, 2007 and entered into force on August 1, 2008. A range of explicit and implicit legal and socio-political factors in the context of China’s transition from a planning economy to a market economy have contributed to the AML’s conception and promulgation. The role of state monopolists in the Chinese economy, the abuse of administrative power by government agencies to restrict competition, and the restrictive and abusive behavior of multinational companies doing business in China (whether actual or perceived) have been at the heart of public debates on the necessity and suitability of the AML over the past fourteen years. While many welcome the AML, some have expressed concerns over the potential for the law to harm businesses, especially foreign companies, and whether it will stunt innovation. The AML contains the objectives, principles, and general legal framework of the new Chinese competition law regime, but the delineation and interpretation of its provisions have been left to implementing regulations, decisions of the enforcement agencies, and the judicial interpretations. By the time it came into force, other than some rules on the new merger notification thresholds, most of the much-expected AML implementing regulations and the detailed AML enforcement mechanism had yet to be published or announced. This article first examines how the AML deviates from international competition law norms and then discusses the potential effectiveness of the law as well as the challenges to its enforcement mechanism.

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