Academic journal article Washington International Law Journal

China's New Anti-Monopoly Law: A Perspective from the United States

Academic journal article Washington International Law Journal

China's New Anti-Monopoly Law: A Perspective from the United States

Article excerpt

I. INTRODUCTION

In August 2007, China enacted an Anti-Monopoly Law, becoming one of roughly ninety nations (including the U.S., the European Union, Canada and Japan) to establish a comprehensive regulatory regime governing competition.1 Since the advent of China's economic reform program beginning three decades ago, China has been moving to integrate its economy within the global trading system.

In contrast to China's World Trade Organization ("WTO") accession, no established global framework of rules exists with respect to competition policy, reflecting a lack of global consensus on the goals and methods of competition policy enforcement.2 National competition regimes and policies differ substantially. Accordingly, in enacting anti-monopoly legislation, China could not?even if it had so chosen?conform its competition policy regime to a single unitary system of multilateral norms. For China, divergence from at least some national competition regimes has been inescapable.

This article provides an overview of China's Anti-Monopoly Law ("AML") with emphasis on key areas of significant apparent divergence from U.S. antitrust policy. Part II of this article addresses the evolution of anti-monopoly policy in China and the United States, observing that where differences exist, China's AML frequently reflects principles similar to those once embedded in U.S. antitrust policy, which have been abandoned or modified by U.S. policymakers and courts in a sustained process of policymaking through trial and error. In general, U.S. antitrust policy has evolved from a system of regulation based on political, social, and ideological considerations to one premised on modern economic principles. Part III examines specific areas of divergence between the AML and U.S. antitrust policy, describing how past U.S. policies, which find parallels in the AML, were modified or abandoned over time. Particular emphasis is given to U.S. antitrust policies which came to be seen as impediments to economic growth, such as the antitrust treatment of agreements constituting so-called "per se" violations (II.A), dominant market position (II.B), intellectual property rights (II.C), and differential treatment of various industries as a result of their relationships with government organizations (II.D, E and F). Part IV concludes that in enacting the AML, Chinese policymakers aim to promote economic growth and innovation. It also expresses the hope that the U.S. experience, which was driven by the need to increase its own economic dynamism, may serve as an abiding point of reference to China's policymakers.

II. EVOLUTION OF ANTI-MONOPOLY POLICY IN CHINA AND THE UNITED STATES

In both China and the United States, the enactment of anti-monopoly legislation was characterized by uncertainty and lack of consensus. It has taken nearly a century for the United States to arrive at a workable solution. While China will undoubtedly find its own path, as the U.S. academic Hans B. Thorelli observed in the Preface to his magisterial history of the early evolution of U.S. antitrust doctrine, "other nations and international bodies considering measures to repress of control monopoly should stand to gain" by studying the evolution of U.S. antitrust policy.3

A. Background of China's Anti-Monopoly Law

In 1978, China's leaders launched the country on a program of longrun economic reform, emphasizing the introduction of market-based principles, enterprise autonomy, private ownership, and entrepreneurialism.4 Prior to these reforms, although government-owned and run factories and other economic units competed to achieve production quotas and other goals set by central planners, Western-style profit-driven competition between enterprises for markets was virtually unknown.5 After these reforms, however, a dynamic private sector emerged in many economic sectors.6 Competition among enterprises not only became widespread, but frequently took on such an intensity that Chinese observers characterized it as "malignant," "malicious," and "excessive. …

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