Manufacturing News

Competition policy key to China's market reform and opening-up

China will further promote the amendment and supporting legislative formulation of the Anti-monopoly Law (AML), lay down anti-monopoly guidance, and reinforce investigation and treatment of administrative monopoly cases, said Gan Lin, vice-minister of the State Administration for Market Regulation, on July 31. Government officials and experts from worldwide, and executives of Chinese and multinational companies in various industries welcomed the administration's decision for a better and fairer market.

China handled 163 monopoly agreement cases, and 54 market ascendancy abuse cases in the past 10 years, with penalty amount reaching 11 billion yuan ($1.62 billion), said Gan at the 2018 China Competition Policy Forum on July 31, one day ahead of the 10th anniversary of the implementation of Anti-monopoly Law in China.

The government's anti-monopoly function, previously scattered in three agencies, was unified and moved to the newly established State Administration for Market Regulation this March.

Gan said the administration is setting up an anti-monopoly data base as well as an expert consulting system to build a unified national market.

Government officials and experts from the United States and the EU shared their cooperation experiences with China in competition policies, and affirmed the key role of competition policy in the reform of China's market economy.

Maureen Ohlhausen, commissioner of US Federal Trade Commission, said she was happy to see the three market regulation agencies in China recently have been consolidated into a single agency. She added that strengthening the institution is the best approach to market regulation.

Transparency is critical in market regulation, and the previous three AML agencies in China took impressive steps in recent years to increase their transparency. "I applaud for the Chinese agencies," she said.

China's participation in international dialogue on competition issues continues to signal that the country values regular international engagement, added the commissioner.

Roger Alford, deputy assistant attorney general of US Department of Justice, regarded China's 40 years of reform and opening-up a fabulous success, pointing out that Chinese people have 20 times as much income than four decades ago. "There is no doubt that today China is a major player in the world economy," he said.

Alford also praised the political and institutional changes that have occurred in China, including the merger of the three agencies.

Carles Esteva Mosso, deputy director-general in charge of mergers in DG Competition, said China has progressed very much in the past 10 years in competition laws, and he believes the EU-China cooperation framework has contributed to this success, pointing out that the DG Competition has cooperated with China's Ministry of Commerce (MOFCOM), one of the previous three agencies, in more than 40 cases starting from 2009.

Executives of Chinese and multinational companies in various industries also expressed the key role of competition policies in regulating market in the era of economy reform.

Ye Hongjun, general counsel of China COSCO Shipping Co Ltd, said China's anti-monopoly institution helped to maintain a reasonable pattern of market competition by solving problems professionally.

Kyle Andeer, vice-president of Apple in charge of competition, commercial and international law, thanked the assistance of China's National Development and Reform Commission and MOFCOM in interpreting the laws since he took office eight years ago and looked forward to the next decade.

"China is an incredible important market for Apple," said Andeer. "And it is vital for us to understand why the decision is made. The institutions...helped to keep us up to date...and we had candid conversations with policy makers," he added.

"The year 2018 is the 40th anniversary of China's reform and opening-up, 10th anniversary of the AML implementation, and the 20th anniversary of Tencent's establishment," said Guo Kaitian, senior vice-president of Chinese tech giant Tencent.

Guo said regulated competition is the foundation of the orderly development of the internet industry, thus Tencent has established a special team focusing on anti-monopoly competition work. Guo also suggested the government to regard the internet as a basic facility of the society, not a single commercial product.

Gao Hongbing, vice-president of China's e-commerce tycoon Alibaba Group and also the director of AliResearch, said the market competition rule has altered dramatically in the past 20 years given the development of digital economy.

"The innovation and development of digital economy overturned business logic and talents concept of the traditional industrial-based economy," he said. "And China's competition policies and AML should focus on expanding customers' welfare and promoting the digitalization of the economy."

Patricio Delgado, vice-president of Ericsson, said the competition policy and enforcement promoted China's economic development.

He added that China's economic growth averaged 9.5 percent per year and seems like to continue at that pace for some time over the past 25 years. Economic experts at the Organization for Economic Co-operation and Development (OECD) said this extraordinary economic performance can be attributed to changes in government economic policy that have progressively given greater rein to market forces.

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