Tuesday, August 4, 2009
Posted by D. Daniel Sokol
Wu Hanhong of Renmin University's School of Economics explores The Competition Policy in China: Past, Present and Future.
ABSTRACT: The fundamental and in‐depth change in the economic system has been the transition from a planning economy system to a market economy system since the reform and opening‐up policy was implemented in China in 1978. It is well known that competition is the essential feature of a market economy. Without competition, a market economy will be out of the question. However, in the realistic market competition process, there is a great variety of practices of unfair competition and anti‐competitive practices, because some undertakings in market competition, in order to maximize their profits, are bound to fight against and elbow out their competitors by various means, to strive for a monopoly and obtain economic gains. If such undertakings’ acts are left to themselves and no effective measures have been taken to control and cease them, market competition and the functions of market mechanism will be impaired, economic vigor will be killed, technological innovations and technological advances hindered, and consumers’ interests damaged. The market mechanism per se cannot solve those “market failures” mentioned above, which has to be rectified through the government’s “visible hand” to keep market economy in healthy operation, and this is the very purpose of a competition policy.