Mooted anti-monopoly law to benefit all
(China Daily)
Updated: 2004-06-02 08:53

The National People's Congress (NPC) Standing Committee official, who refused to be identified, said: "The primary basis for anti-monopoly legislation is to ensure that competition in the market does not stall."

He said all enterprises are left in very difficult situations once one group corners the market.

China does not have a single anti-monopoly law at the moment, but has specific regulations scattered among other legislation that ban such an outcome, the official said.

And China has enforced a series of laws and regulations to ensure fair market competition, including a code outlawing unfair competition in 1993 and a price law in 1997.

The creation of the anti-monopoly law has been put on the legislative agenda of the 10th NPC in its five-year tenure, which ends in 2007. But the official refused to reveal the timetable for the legislation.

However, some foreign-invested business have been becoming a little uneasy in the wake of a recent report that warned that foreign business giants were building monopolies in China.

After a year of investigation, the State Administration for Industry and Commerce's fair trade bureau came up with the report entitled "The Competition-restricting Behavior of Multinational Companies in China and Countermeasures."

The report gave specifics. For instance, Microsoft's operating system software and Tetra Pac's packaging materials each have 95 per cent shares of the Chinese market.

Eastman Kodak, which formerly held more than 50 per cent of China's roll film market, is expected to further consolidate its market dominance after taking 20 per cent of its sole major Chinese rival, Lucky Film Corp.

According to the report, some transnational companies have been using their dominant roles in technology, brand recognition, capital and management to suppress competitors and maximize profits.

On the eve of the release of WPS97, a set of computer programmes developed by a Chinese company, a multinational hurriedly brought forward its version of the same kinds of products at much lower prices.

In addition, certain multinationals tend to purchase the exclusive promotion rights of supermarkets during peak seasons, barring the supermarkets from displaying other brands.

Some companies also set different prices for the same kind of products, with the Chinese goods costing twice as much compared with their countries of origin.

According to the report, another way that companies which own advanced technology or other intellectual properties squeeze the market is by refusing to sell their services or products to Chinese companies.

To ensure dominance, some multinationals carry out sweeping mergers and acquisitions to absorb their major competitors.

It reduces the number of competing companies until a few multinationals are left standing, the report says.

It lists a number of industries where free competition may be threatened by multinationals.

The list includes software, photosensitive material, mobile phones, cameras, tyres and soft packaging.

However, those allegedly pushing for monopolies have argued strongly against the report.