Fear of foreign juggernauts speeds up China's anti-monopoly legislation
01-31-2005, 07h20
Goh Chai Hin - (AFP)
BEIJING (AFP) - China's glacially slow effort to introduce an anti-monopoly law is suddenly being sped up by concerns that foreign multinationals are getting to dominate key markets.
Officials have agonized over the fine details of the rules for nearly two decades but the idea of Microsoft-style juggernauts rolling ashore has lent the process a new sense of urgency, the China Business Weekly reported.
"Politically, the threat of foreign monopolies may be the justification for having the law," said Mark Williams, an expert on anti-monopoly law at Hong Kong Polytechnic University and the author of an upcoming book on the subject.
"But in reality it may well be used as a protectionist engine. It may well be applied against foreign entrants to the market but domestic state monopolies are unlikely to be investigated or sanctioned," he said.
With the new-found anti-foreign momentum, the draft could be turned into law by the end of 2005 if the process goes smoothly, the China Business Weekly said, without giving sources.
It cited increasing concerns that multinationals have gained control of certain industries in China, adding that a law is now "desperately" needed to rein in their power.
For example, Microsoft's ubiquitous Windows operating system and Tetra Pac's packaging materials both hold 95-percent shares in the Chinese market, according to the newspaper.
Eastman Kodak, which has a large share of the roll film market, has strengthened its position even further with the recent purchase of 13 percent of the shares in its only Chinese rival, Lucky Film Corp., the report said.
Preparation work for the anti-monopoly law began as early as 1987 but has never moved beyond the drafting stage, with with of the main reasons for the slow pace being the existence of state monopolies in areas such as insurance.
Government departments also wield monopoly-style power in some industries by coercing people to buy commodities from certain operators, the report said.
The draft currently in circulation will address this issue head-on by paying special attention to administrative monopolies, the newspaper said, without providing further details.
Another obstacle that has kept the anti-monopoly law in limbo is the issue of who will be in charge.
There is widespread consensus, even among Chinese officials, that the best solution would be a powerful stand-alone agency, preferably at the ministerial level, with enough muscle to enforce compliance.
"Obviously, an independent and powerful administrative or quasi-judicial agency is more suitable than several anti-monopoly offices in separate departments," said Huang Yong, a law professor at Beijing's University of International Business and Economics.
The problem is at least three state agencies are vying for the responsibility and one of them, the commerce ministry, has even set up a "shadow regulator" in the form of a monopoly office.
The other two bodies are the State Administration for Industry and Commerce and the National Development and Reform Commission, a key planning and oversight group on the economy.
If the trio cannot agree about anything else, they do agree that a newly created monopoly regulator would be a bad idea, analysts said.
None of the three is a clear front-runner yet and in the scheme of things it may not matter who eventually wins, since every one of them is too hampered by vested departmental interests to act as a disinterested actor.
"Whoever eventually gets the prize, my guess is it won't work well," said Williams of Hong Kong Polytechnic University.
"It will be another piece of legislation that acts like a loaded gun which occasionally goes off when it's politically opportune."
turkishpress.com |
