Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Sunday, May 3, 2009

MOFCOM Can Reach SOEs for Merger Control

Posted by D. Daniel Sokol

While I was busy at the Loyola Antitrust conference on Friday, I discovered via Paul Jones that MOFCOM has exerted jurisdiction for the merger between two SOEs.

As Paul explains:

On Friday, May 1, 2009 (which is a major public holiday in China) stories started to appear on an interview given by MOFCOM officials stating that the merger of two state-owned enterprises, China Unicom Co., Ltd. and China Network Communication Group Corporation on October 15, 2008 was illegal because it was not notified to MOFCOM.

News Report (in Chinese):

This report is significant because the accusation makes a statement of MOFCOM¡¯s position on how Article 7 should be interpreted, and such interpretation asserts the jurisdiction of the AML over the operations of the SOEs. There have been many mergers of SOEs since the AML came into force and there will be many more, as the stated objective of the State Assets Supervision and Administration Commission (SASAC) is to significantly reduce the number of state-owned enterprises. The response of SASAC and the State Council (to which SASAC, MOFCOM and the Anti-Monopoly Committee report) will provide an indication of the current role of SOEs in China's economy.

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