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BIZCHINA / Center
Landmark anti-monopoly law passed
(China Daily / Xinhua)
Updated: 2007-08-31 09:39
Foreign acquisitions of Chinese companies will be subject to stringent
new checks intended to protect national economic security under a new law
passed Thursday.
After 13 years on the drawing board, the Anti-Monopoly Law passed by the
Standing Committee of the National People's Congress (NPC), China's top
legislature, will come into effect on August 1, 2008.
"As well as anti-monopoly checks stipulated by this law, foreign mergers
with, or acquisitions of, domestic companies or foreign capital investing
in domestic companies' operations in other forms should go through
national security checks according to relevant laws and regulations" it
reads.
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Foreign companies have begun to acquire major State-owned enterprises or
companies with famous brands, raising concerns about economic security.
China already has a basic security check system for foreign mergers and
acquisitions.
Foreign investors should apply for approval from the Ministry of Commerce
(MOFCOM) if their purchases of domestic companies affect national
economic security, take place in key sectors or lead to a transfer of the
operating rights of famous domestic brands, according to a regulation
issued by the MOFCOM along with five other government organs last year.
In December last year, the State Council, China's cabinet, released a
list of strategic sectors in which the State would retain control.
The list included military-related manufacturing, power production and
grids, petroleum, gas and petrochemicals, telecom manufacturing, coal,
civil aviation and shipping.
The law also bans monopolistic arrangements, such as cartels and other
forms of collusion, and provides for the investigation and prosecution of
monopolistic practices, while protecting monopolistic arrangements that
promote innovation and technological advancement.
(For more biz stories, please visit Industry Updates)
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