Sunday, August 17, 2008
Posted by D. Daniel Sokol
Mark Williams (Hong Kong Polytechnic University Law) writes on The Context of Chinese Industrial Policy and the Antimonopoly Law.
ABSTRACT: Some would argue that the implementation of the Antimonopoly Law is an important milestone along the road of China’s transition to a market-orientated economy in which private capital plays a pre-dominant role, just as it does in developed economies in other parts of the world.
In this scenario, the government will continue to retreat from the command economy of the past by continuing to corporatize and then privatize state-owned enterprises and will become an impartial regulator of markets, not a hands-on participatory owner. The judicial system will, in time, become more independent and robust, regulatory agencies and ministries will become benign adjudicators of enterprise conduct and market structure guiding the invisible hand of the market where imperfections intrude and mar efficiency. The consumer, not the producer, will be king and China will become the world’s leading economy, eclipsing Europe and the United States in due course given its huge population and geographic extent. The place of China in the world pecking order will be returned to its historical antecedents of two hundred years ago when China accounted for 30 percent of global gross domestic product. This is the optimists’ scenario.
But it is entirely possible that the economic transition that China has been undoubtedly undergoing for almost 30 years will not result in this outcome. The Chinese authorities would undoubtedly like to achieve the economic success predicted above but they may have a rather different process in mind to achieve that goal. This article argues that the Antimonopoly Law is actually a component part of a strategy to achieve this end.