Wednesday, November 7, 2007

China's New Anti-Monopoly Law: More Power to the People or the Government?

China’s promulgation of its first ever comprehensive anti-monopoly statute captivated the interest of many scholars and practicing lawyers. Since the first draft of the Anti-Monopoly Law (“AML”) first surfaced, countless articles and comments have been written about the law, given the heavy-weight nature of a comprehensive competition law. Some even referred to this newly-adopted AML as “an economic constitution”, underlining its prospective important rule in China’s economy.

As the clock ticks down toward August 1, 2008, when the AML will become effective, some have expressed their concerns and thoughts about what exactly the AML could bring to the table in terms of fulfilling the stated legislative purposes of this law. Will it be a law enforced in the best interest of protecting consumer rights and general public interests, or will it be just another vehicle for the government to increase its power and influence in the private domain of business and commerce?

Recently, I finished reading an article written by Mr. Paul Jones, a Canadian international lawyer based in Toronto. Paul not only does an excellent job of reassembling the AML in a more reader-friendly fashion (unless you are a civil law statute purist who loves reading civil codes as they are), but also adds some very thoughtful discussions about what the AML is about or could morph into in the future:

On August 30, 2007, after l3 years of discussion the 29th Session of the l0th National People's Congress adopted the Anti-Monopoly Law ("AML") to come into effect on August l, 2008. Will this be the new "economic constitution" for China's market economy as hoped by the sponsors; or a source of "uncertainty for domestic and foreign companies over how the government will use its new powers?" Foreign companies are particularly concerned about provisions allowing for a review of mergers and acquisitions on national security grounds.

The answer at this time must be that, like the development of China's market economy, the AML is still a work in progress. While the basic framework of general principles has been set out in the AML, as would be appropriate for a fundamental piece of civil law legislation, the details that expand upon and clarify the principles will come in the regulations, measures and guidelines that hopefully will be issued in the months to come.

Please click here to read the entire article.

China’s Foreign Investment Guide Catalogue Revised

November 7, 2007 marks an important date for foreign investment policies in China, as reported by the China Briefing Blog and elsewhere (in Chinese):

The Ministry of Commerce and the National Development and Reform Commission jointly released the latest Catalogue for the Guidance of Foreign Investment Industries today.

The catalogue, approved by the state council, will take effect on December 1 according to the NDRC’s website. The new catalogue replaces a catalogue that came into effect in 2004.

While continuing to encourage foreign investment towards the hi-tech, equipment manufacturing and new material industries, the catalogue adds service-outsourcing and modern logistics to the service industry in an effort to fulfill China’s commitment to the WTO.

Overseas investment targeting conventional manufacturing industries in which China has mastered advanced technologies and has competent production capacity is no longer encouraged in the new catalogue.

Under pressure to clean up a growing environmental catastrophe, Beijing is pushing FDI towards developing clean production, reproducible energy, and ecological protection. Foreign capital is not permitted in the exploration of rare and non-reproducible mineral resources, or in high consuming and polluting industries.

Hoping to further spur development away from the booming coast, the revised catalogue drops the article limiting foreign investment in the central and western regions of China. Introducing foreign capital will also be considered in rejuvenating Northeast China and other historical industrial bases.

These revisions to the Investment Guide Catalogue are consistent with recent changes in other Chinese laws and regulations. For example, China revised it tax code to unify tax rates for domestic and foreign-originated companies, while at the same time providing tax incentives for clean and environmentally friendly industries. In addition, China modified its catalogue of export products to limit the export of inexpensive and labor-intensive goods, with the purpose of adjusting trade imbalance with its trading partners and addressing environmental concerns.

Here is the revised Investment Guide Catalogue in Chinese [I have not been able to find an English version]; here is the old Investment Guide Catalogue in English as of 2004. Be sure to note the differences.

The English version of the Revised Foreign Investment Guide Catalogue can be found below:

Here, for an unofficial translation.

So far, I have not been able to find an official translation. Generally, one should be able to find official translations of important laws and regulations at

If a reader finds the official translation, would you please leave the URL of the site in your comment to this post? Thanks!