Draft Anti-Monopoly Law Will Prohibit Administrative Monopoly

According to an article in the Guangming Daily (in Chinese), Wang Xiaoye, a China Academy of Social Sciences Legal Institute Fellow and Vice President of the Economic Legal Association, said recently that the latest draft of the Antimonopoly Law has stronger and more specific provisions proscribing administrative monopoly. Administrative monopoly occurs in the state owned sector when a government bureau or state owned enterprise (SOE) takes advantage of its position to prevent market entry or competition or even drives another company from the market. (In the example given in the article, the bureau with authority over wedding licenses only accepts photos for the licenses from a single local supplier.)

According to other sources, one of the major problems delaying the completion of the Antimonopoly Law has been addressing the issue of administrative monopoly. That draft law has been discussed for over ten years, with many drafts circulated for comment at each stage of the drafting. The Chinese government seems to find the question of administrative monopoly especially difficult because it cannot adopt rules modeled on those used in developed countries, since the developed world generally has many fewer administrative monopolies. For most other concepts in the draft law, the Chinese have adopted the language of competition regimes in the United States, Germany, and the European Union.