Corporate megadeals underscore need for unified international regulatory regime

By Hu Weijia Source:Global Times Published: 2018/3/14 23:28:40

"Bayer on Tuesday secured conditional approval from China's Ministry of Commerce for its planned acquisition of the world's No.1 seed company, Monsanto," Reuters has reported. After an anti-monopoly review of about one year, the ministry ordered the drug producer to spin off some businesses globally, including vegetable seeds, soybeans and cotton.

The size of some transnational enterprises has far surpassed the GDP of many small countries. Issues such as monopoly power are increasingly becoming problems due to a lack of high-level international mechanisms to coordinate regulatory authorities.

Current government supervisory systems have lagged behind the development of transnational enterprises.

Although branch companies and subordinated entities usually operate with considerable autonomy from their headquarters to increase flexibility and ensure the success of localization efforts, their personnel and property are always under unified management to ensure optimized distribution of resources.

But government supervision in different countries is still fragmented. Developed countries have enough economic strength to write the rules of the road for trade and investment, while developing countries often complain about the Western world's monopoly over the power of discourse.

As countries compete fiercely for investment from transnational enterprises, loopholes persist for investors to seek additional benefits.

Globalization has become a driving force to optimize resource distribution around the world, but the integration of government supervision across borders has not been thoroughly studied. It is time that we give the concept some serious thought.

The conditional approval from China's Commerce Ministry is an attempt to improve the current government supervision system. Reuters said in February that Bayer is set to win conditional EU antitrust approval for its bid for Monsanto.

The takeover would offer a chance for the integration of governments' supervisory powers.

Bayer has reportedly pledged to sell certain seed and herbicide assets to German chemical giant BASF to address EU regulatory concerns. The process can be viewed as a grand bargain between transnational enterprises and the evolution of global governance.

China will actively participate in global economic governance and regional cooperation to assume its responsibilities.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON ECONOMY

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