China deliberates new law
(Xinhua)
Updated: 2006-06-25 09:35
All companies, except banks and insurance companies,
seeking mergers or acquisitions would have to notify the authorities if the
combined annual turnover of all parties exceeds 1.2 billion yuan or the turnover
of one of the parities exceeds 800 million yuan.
"The draft law does not
require the compulsory reporting of most merger and acquisition cases, but it is
international practice to ask major, especially transnational, companies to
notify the government," he said.
Cao said administrative obstacles to
competition were still widespread, damaging fair competition.
The draft
law would prohibit governments from appointing producers or suppliers for unit
or individual procurement, bans any hindrance to free commodity distribution,
and forbids governments stipulating discriminatory tender requirements to block
bids from firms from other places.
The draft law would ban companies
hindering competition and seeking a monopoly by abusing intellectual property
protection rights.
In China, some industries, such as telecommunications,
railway, electric power, are monopolized by a few state-owned
enterprises.
An expert participating in drafting the law and declined to
be named, said, "once the draft law is adopted, the monopolistic behavior of
state-owned enterprises will be affected and curbed to some extent. But
anti-monopoly law could not solve all the problems, reforms should be deepened
in the above industries to further curb monopoly and promote fair
competition."
The anti-monopoly law is a basic law for market economy. To
date, there have been more than 80 countries adopting anti-monopoly
law.
China planned to stipulate anti-monopoly law as early as in 1994.
Experts said China's socialist market economy has turned to be mature over more
than one decade, and in current market circumstances, the introduction of an
anti-monopoly law is imperative.
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