SOEs and competition policy in China

Posted by D. Daniel Sokol

Wei Tan (Renmin University) discusses SOEs and competition policy in China.

ABSTRACT: Since China’s Anti-Monopoly Laws (“AML”) bill passed in 2008, competition policy in China is thoroughly analyzed by antitrust practitioners around the world. The rulings by the Chinese antitrust enforcement agencies are often compared with rulings by competition authorities in developed economies. These comparisons may not properly take into account the major distinction of the Chinese economy. Namely, China’s economy is still in the transition from a planned economy to a market economy. As such, state owned enterprises (“SOEs”) play a much bigger role in China than in developed economies.

Article Seven of China’s AML has received considerable amount of criticism as it does not clearly stipulate which are those industries concerning the lifeline of the national economy and national security. While SOEs dominate in these industries, SOEs are also active in many arguably nonstrategic industries, such as real estate development.

This paper examines the SOEs and their effect on China’s competition policy and projects future relations between SOEs and antitrust policy in China.