by Qianlan Wu.

When it comes to doing business with China, for many, checking relevant laws and regulations may not necessarily stand at the top of the to-do list. The Chinese Ministry of Commerce’s decision  to reject Coca Cola’s attempt to acquire Huiyuan in 2009, however, seems to have sent out a different message.    

The decision was made on the basis of the Antimonopoly Law (AML), which was enacted in 2007 and effected in 2008. The AML was enforced jointly by powerful ministerial bodies such as the National Development and Reform Commission, State Administration of Industry and Commerce and the Ministry of Commerce under the chapeau of the State Council (central government) Antimonopoly Commission, a regulatory framework embedded within the Chinese government administrative system.

Similar to other competition regulatory regimes, the AML regulates public and private restraints on market competition, including but not limited to merger control. With respect to merger control, market players meeting certain a revenue threshold are obligated to notify their merger and acquisition proposal to the Ministry of Commerce and cannot proceed if not cleared by the regulator. The size of the Chinese market and the level of China’s involvement in globalization, hence, have made China one increasingly important competition regulator to watch for on the global market. Since its enactment, the AML has received unprecedented attention from the international business community and global actors such as the US and EU.

The China seminar given by Professor Wang Xiaoye on 25 September could not have come at a better time. A distinguished professor from Hu Nan University, Professor of Law from the Institute of Law, the Chinese Academy of Social Sciences and legal expert of the State Council Competition Commission, Professor Wang provided an authoritative review of the enforcement of the AML to date. Professor Wang indicated that the Ministry of Commerce, despite being a new and understaffed merger regulator has handled over 400 cases and issued 16 decisions in just four years. By critically analyzing the achievements of Ministry of Commerce in merger control, Professor Wang reaffirms that China is quickly becoming a major competition regime that cannot be ignored by global business. However, the achievements are not without challenges, as illustrated by Professor Wang, Chinese competition authorities face challenges in regulation of resources, political economy and the ideological legacy of market regulation enforcement.

Professor Wang’s presentation was well received by the audience, who were from interdisciplinary research backgrounds on contemporary China. Again the discussion that followed showed the audience’s shared interest and concern with regard to the enforcement of the AML.

As a matter of fact, the interconnectedness of global markets has brought competition laws worldwide into ever-closer communication leading to convergence. However, stronger players in globalization tend to have a bigger say in influencing norm making in competition law. This, in combination with the enforcement of competition rules by competition authorities, might eventually shape the global competition regulation road map.

Where and how China could stand in this road map, seems to depend on many factors. These factors may go beyond those debated in the seminar. However, with its rise, China may at some stage very likely face the call for search, reflection and building of a philosophical basis for its AML enforcement. To this end, maybe some soul searching effects around the law can now serve as food for thought for the years to come.   

Dr Qianlan Wu is Senior Fellow of China Policy Institute and lecturer at the School of Contemporary Chinese Studies, University of Nottingham.

Opinions expressed in the CPI blog do not represent the views of the China Policy Institute or the School of Contemporary Chinese Studies at the University of Nottingham. They are the personal views of the bloggers/authors.