Law ‘will level the play­ing field’

China Daily (Canada) - - BUSINESS - By LI JIABAO li­ji­abao@chi­

The Min­istry of Com­merce is draft­ing im­prove­ments to the na­tion’s an­titrust laws, part of the govern­ment’s drive to build a level play­ing field for all com­pa­nies.

“We have fin­ished the draft of ‘ Im­pos­ing Re­stric­tive Con­di­tions on the Con­cen­tra­tion of Un­der­tak­ings’. It is un­der­go­ing in­ter­nal ap­provals and is ex­pected to be re­leased in the first half of this year,” Shang Ming, di­rec-tor-gen­eral of the anti-mo­nop­oly bureau of the min­istry, told a news con­fer-ence on Thurs­day.

The rules will spell out in de­tail the re­stric­tions that may be im­posed by anti-mo­nop­oly au­thor­i­ties in re­views of merg­ers and ac­qui­si­tions.

The reg­u­la­tions will re­place in­terim pro­vi­sions is­sued in July 2010, known as Im­ple­ment­ing As­sets or Busi­ness Divest­ment Re­lated to the Con­cen­tra­tion of Un­der­tak­ings.

China is a rel­a­tive new­comer in terms of anti-mo­nop­oly re­views, but its re­views in­creased rapidly af­ter Aug 1, 2008, when the Anti-Mo­nop­oly Law­took ef­fect.

As of Dec 31, the min­istry had re­ceived 866 fil­ings re­lated to in­dus­trial con­cen­tra­tion, of­fi­cially ac­cepted 797 and set­tled 740 cases, ac­cord­ing to the min­istry.

Break­ing down the set­tled cases, 717 were ap­proved with­out con­di­tions, 22 were con­di­tion­ally ap­proved, and one was re­jected, the min­istry said.

In 2013 alone, the min­istry re­ceived 224 fil­ings in­volv­ing in­dus­trial con­cen­tra­tion, up 8 per­cent, and ac­cepted 212 of them, up 12.8 per­cent.

Of those cases, 207

were re­solved, up 26 per­cent, with four con­di­tion­ally ap­proved.

In April 2013, the min­istry ap­proved the ac­qui­si­tion of Xs­trata Plc by Glen­core In­ter­na­tional Plc, the largest merger in min­ing his­tory, but with re­stric­tions, say­ing that the trans­ac­tion would limit com­pe­ti­tion in cop­per, lead and zinc con­cen­trates.

China is the largest tar­get mar­ket for Glen­core’s min­ing prod­ucts and an im­por­tant tar­get mar­ket for Xs­trata’s min­ing prod­ucts.

The Na­tional De­vel­op­ment and Re­form Com­mis­sion has con­firmed that it is con­duct­ing an an­titrust in­ves­ti­ga­tion into US mo­bile chip­maker Qual­comm Inc for al­legedly abus­ing its dom­i­nance in the wire­less telecommunication copy­right and chip mar­kets.

“As for re­stric­tive con­di­tions, China took var­i­ous mea­sures, and they were de­ter­mined by the specifics of each case and the dif­fer­ence in terms of com­pe­ti­tion is­sues.

“We are sum­ma­riz­ing the ex­pe­ri­ence from these cases and will set down ef­fec­tive mea­sures in the draft rule,” Shang said.

To make re­views more ef­fi­cient and re­duce fil­ing bur­dens, the min­istry on Feb 11 re­leased the fi­nal ver­sion of its In­terim Pro­vi­sions on the Stan­dards that Ap­ply to Sim­pli­fied Cases of Con­cen­tra­tions of Un­der­tak­ings.

The doc­u­ment is seen as a gen­uine fast-track pro­ce­dure for sim­ple cases.

Zhang Yizhe, a part­ner in the an­titrust and com­pe­ti­tion prac­tice at Jones Day law firm, said that the min­istry has es­tab­lished it­self as an “im­por­tant stop” in the global merger clear­ance process for in­ter­na­tional trans­ac­tions.

“The big­gest chal­lenge dur­ing the min­istry’s in­ves­ti­ga­tion of trans­ac­tions that may raise com­pe­ti­tion con­cerns is that the par­ties aren’t given much de­tail re­gard­ing the min­istry’s con­cerns, the un­der­ly­ing ev­i­dence and its the­ory of com­pet­i­tive harm,” Zhang said.

Last year, China pledged to ac­cel­er­ate the con­struc­tion of a mod­ern mar­ket sys­tem and let the mar­ket play a de­ci­sive role in al­lo­cat­ing re­sources.

These re­forms are in­tended to end lo­cal pro­tec­tion­ism, strengthen anti-mo­nop­oly ef­forts and com­bat un­fair com­pe­ti­tion.

Yao Jian, spokesman for the min­istry, said that the min­istry and other govern­ment de­part­ments are work­ing to clear re­gional “block­ades” and in­dus­trial mo­nop­o­lies.

That ef­fort in­cludes im­prov­ing tax pro­vi­sions for op­er­a­tions that cover more than one re­gion, re­mov­ing dis­crim­i­na­tory prod­uct and ser­vice prices within a re­gion, and dis­man­tling bar­ri­ers to the flow of prod­ucts and ser­vices be­tween re­gions.

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