Incentives and China's New Antimonopoly Law
1 April 2008
Dr. Fei Deng with former NERA Senior Vice President Dr. Gregory K. Leonard
The People's Republic of China recently enacted a new, comprehensive Antimonopoly Law (AML) that will go into effect in August 2008. As written, the AML is largely consistent with the antitrust laws of the United States and European Union. However, the AML only articulates the broad principles that will guide antitrust enforcement in China. The details of how antitrust enforcement will actually be implemented were left for future development.
This article from Antitrust magazine explores the implications of the AML for competition, for both Chinese companies and multinational companies operating in China. The authors examine the impact of the idiosyncratic nature of the Chinese political and economic environment on potential enforcement of the AML, and address issues including who will bear responsibility for antitrust enforcement, whether enforcers will be able to cope with "administrative monopolies," whether the AML will be used to disadvantage multinational companies rather than to enhance competition, and to what extent the AML will deter companies from engaging in anticompetitive conduct. Given the direction in which China is headed, the authors are optimistic that China's antitrust enforcers will ultimately pursue the goal of enhancing competition.
