Enforcement Trend in the Chinese Antimonopoly Law: Selectively targeting foreign companies and being used as a tool of industrial policies?

Author Name KAWASHIMA Fujio  (Nagoya University)
Creation Date/NO. July 2015 15-J-042
Research Project Comprehensive Research on the Current International Trade/Investment System (pt.II)
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In August 2014, just after celebrating the sixth anniversary of the entry into force of the Chinese Antimonopoly Law (hereinafter, Chinese AML), the National Development and Reform Commission of China, which is one of the enforcing agencies of the law, announced its decisions on the two price-fixing cases in which eight Japanese automobile parts manufacturers and four Japanese bearing manufacturers are involved. Since the time around this announcement, many media reports, Japanese and overseas, have casted doubt as to whether Chinese AML has been used as a tool to "bash foreign capitals" or selectively enforced toward foreign capitals. At the same time in September 2014, the U.S. Chamber of Commerce issued a paper on Chinese AML, which severely criticized it as having been "used as a tool of industrial policies."

Against this backdrop, this paper, by introducing the statistics of formal decisions based on Chinese AML and analyzing their concrete content in details, tries to grasp the trend of its enforcement and examine whether such criticism claiming "bashing foreign capitals" and "a tool of industrial policies" can be sustained. According to the statistics, it is not so easy to conclude that Chinese AML has been selectively enforced towards foreign capitals, but if we examine the concrete content of the decisions in details, there are some decisions where policies other than competition policy, such as industrial policies or resource or food security policy, are reflected in their reasoning for the interference. As the enforcement of the AML by China, which is expanding its presence not only as "the world's factory" but also as "the world's market," has the potential to influence competition in the world market as a whole significantly, it is necessary to continue to monitor the trend of its enforcement carefully and also try to develop disciplines of international economic law which can address the abuse of antimonopoly laws.