2. Although the Anti-monopoly Law devotes a chapter to discussing the administrative monopoly of abusing "administrative power to exclude and restrict competition", the administrative monopoly has not really been included in the scope of anti-monopoly, and the separation of power between administration and market has not been protected by legal provisions. Due to the lack of strict definition, the provisions on price manipulation provide a legal basis for administrative intervention in market pricing. Although government intervention in pricing can ensure temporary price stability, it may invalidate the price signal function of the market and lengthen the time needed for economic adjustment.
3. The Anti-monopoly Law explicitly excludes "industries in which the state-owned economy is in a controlling position, which are related to the lifeline of the national economy and national security" from the scope of anti-monopoly. This special case is equivalent to determining the legitimacy of state-owned enterprise monopoly in the form of law. So far, state-owned enterprises have actually monopolized the factor departments in China, which is the fundamental reason for the distortion of factor prices and structure. Some of these sectors, such as energy and banking, have made some achievements in reform and market opening, and the new Anti-Monopoly Law may bring this reform effort to a standstill and delay the marketization process of factor sectors.
4. China is in the middle period of market economy transformation, and the degree of marketization is bound to continue to improve. The anti-monopoly law should clearly define the division of labor between administrative power and market power, and gradually reduce the space of state-owned monopoly in order to establish a fair competition market mechanism. Any policy formulated in the form of law should be forward-looking, not artificial obstacles. The difficulty in implementing the Anti-Monopoly Law lies in clearly distinguishing monopolistic behavior from normal competition, in which details are the key. Otherwise, the anti-monopoly law in the name of protecting competition may play an anti-competitive role.
5. Administrative monopoly profits drag down national economic growth. At present, the huge profits of state-owned departments such as fuel, electricity and communications, which are calculated by hundreds of billions of yuan, are not the joy of the national economy, but the worry of the national economy.
6. Monopoly maintained by the government, such as limiting the number of licenses for privileged interests, or poor state management, is supplemented by the government's prohibition of competition. Almost all economists are opposed to this monopoly, but where the contradiction lies, the anti-monopoly law is lenient.
-Does the Anti-Monopoly Law protect or restrict administrative monopoly?
First, although the Anti-Monopoly Law devotes a chapter to discussing the administrative monopoly problem of abusing "administrative power to exclude and restrict competition", it makes no mention of the still-popular trading restrictions caused by administrative examination and approval and the lack of competition caused by high "entry threshold". The definition of "abuse of administrative power" is also limited to commodity operator discrimination and geographical discrimination. In other words, administrative monopoly is not really included in the scope of anti-monopoly, and the separation of power between administration and market is not protected by legal provisions.
Secondly, the lack of strict definition of price manipulation provides a legal basis for administrative intervention in market pricing. Under the condition of market economy, especially when the market entry threshold is low, price alliance, which aims at price manipulation, is usually difficult to last, and anti-price manipulation may become an excuse for the government to manipulate prices. More importantly, the Anti-Monopoly Law does not explicitly limit the way and scope of government intervention in the market pricing mechanism. Since the beginning of this year, in the face of inflation, government intervention in market pricing has been everywhere. Although government intervention in pricing can ensure temporary price stability, it may invalidate the price signal function of the market and lengthen the time needed for economic adjustment.
-Does the anti-monopoly law protect or restrict state-owned monopoly?
The Anti-monopoly Law explicitly excludes "industries in which the state-owned economy is in a controlling position and is related to the lifeline of the national economy and national security" from the scope of anti-monopoly. This special case is equivalent to determining the legitimacy of state-owned enterprise monopoly in the form of law. Unlike the anti-monopoly laws of market economy countries, national security is generally aimed at foreign mergers and acquisitions, while in China, non-state-owned enterprises are treated equally with foreign-funded enterprises.
Because the law does not stipulate which industries are related to the lifeline of the national economy and national security, there is actually the possibility that all industries currently controlled by the state belong to industries that need protection. According to SASAC's explanation, the state-owned economy should maintain absolute control over important industries and key areas related to national security and the lifeline of the national economy, including military industry, power grid, petroleum and petrochemical industry, telecommunications, coal, civil aviation and shipping.
According to the data in 2005, among the 39 manufacturing industries calculated by fixed assets, there are 15 with state-owned or state-controlled shares accounting for more than 40%, and these industries occupy key industries such as water, electricity, coal, gas, oil, metal and nonmetal mineral resources. The list can be further expanded to include other service industries, such as banking, railways, medical care and education. What's more, if state-owned enterprises further expand into industries that have been opened in the nearly one year between now and the implementation of the Anti-Monopoly Law next year, they may be required to include state-owned enterprises in these newly expanded industries in the scope of protection of the Anti-Monopoly Law.
So far, state-owned enterprises have actually monopolized the factor departments in China, which is the fundamental reason for the distortion of factor prices and structure. Some of these sectors, such as energy and banking, have made some achievements in reform and market opening, and the new Anti-Monopoly Law may bring this reform effort to a standstill and delay the marketization process of factor sectors.
Although the implementation of the Anti-Monopoly Law has not weakened or even encouraged administrative monopoly and state-owned monopoly, its impact on FDI may still be neutral, which is in line with the policy of "two taxes in one". The Anti-Monopoly Law treats Chinese and foreign-funded enterprises equally, which is conducive to fair competition outside the monopoly industries of state-owned enterprises. The influence of factor price control on foreign-funded enterprises with advanced technology or strong financing ability may be less than that on domestic non-state-owned enterprises; The merger and acquisition policy of foreign-funded enterprises in China may be gradually transparent with the promulgation of the Anti-Monopoly Law. Of course, the disadvantage is that the uncertainty of foreign capital in anti-monopoly litigation is high, and the litigation procedure may be long.
China is in the middle period of market economy transformation, and the degree of marketization will continue to improve. The anti-monopoly law should clearly define the division of labor between administrative power and market power, and gradually reduce the space of state-owned monopoly in order to establish a fair competition market mechanism. Any policy formulated in the form of law should be forward-looking, not artificial obstacles. The difficulty in implementing the Anti-Monopoly Law lies in clearly distinguishing monopolistic behavior from normal competition, in which details are the key. Otherwise, the anti-monopoly law in the name of protecting competition may play an anti-competitive role. ■