USCBC Report: Competition Policy and Enforcement in China

China’s increased level of competition enforcement activity and investigation methods have prompted growing attention and concern from US companies.

Washington, DC, September 3, 2014 – China’s increased level of competition enforcement activity and investigation methods have prompted growing attention and concern from US companies, according to a US-China Business Council (USCBC) report released today on China’s competition policy and enforcement.

"Since China’s Antimonopoly Law (AML) came into force in 2008, China’s three enforcement agencies have taken steps to implement competition enforcement, including dramatically ramping up the number of enforcement staff,” USCBC President John Frisbie said. “USCBC has been monitoring publicly announced cases in China and our analysis indicates that both foreign and domestic companies have been targets of AML-related investigations. But in recent months foreign companies appear to have faced increasing scrutiny.”

“Eighty-six percent of firms surveyed expressed some level of concern about competition enforcement activities in China,” Frisbie said. “Targeted or not, foreign companies have well-founded concerns about how investigations are conducted and decided. Due process, transparency, and the methodology for determining remedies and fines all need improvement.”

“For American businesses operating in China, China's AML regime is creating more questions than answers,” Frisbie said. “USCBC’s membership is asking: Will China use the AML to protect its domestic industry rather than promote fair competition? Is the Chinese government using the AML to force lower prices, rather than letting the ‘market play the decisive role’ as enshrined in China’s new economic reform program?  The answers are not fully determined yet, but in at least some cases so far, USCBC sees reasons for concern.”

USCBC’s report provides detailed recommendations for improvement in China’s competition regulatory regime.

“It should be expected that China, with its large economy, will develop into the third leg of the global antitrust regime, along with the United States and the European Union,” Frisbie concluded. “The recommendations in this report are directed at supporting the development of a competition regime in China that protects legitimate interests of all stakeholders and integrates rather than conflicts with international best practices.”  

The US-China Business Council (USCBC) is a private, nonpartisan, nonprofit organization of over 200 American companies that do business with China. For over four decades, USCBC has provided unmatched information, advisory, advocacy, and program services to its membership. Through its offices in Washington, DC; Beijing; and Shanghai, USCBC is uniquely positioned to serve its members' interests in the United States and China.