Antitrust advances nation to rule of law

Source:Global Times Published: 2014-8-21 0:28:02

A record anti-trust fine totaling 1.23 billion yuan ($201.12 million) has been levied on 12 Japanese companies by the Chinese National Development and Reform Commission. These auto parts makers are expected to pay a great cost for fixing prices in the Chinese market. This is the most serious penalty inflicted under China's six-year-old anti-monopoly law.

Global opinion has not overreacted to this punishment, although some Japanese and Western media proclaimed that it is an apparent effort by Chinese government to pressure foreign companies in China, by aiding local enterprises to gain more market share.

But in the face of China's allegations, all Japanese companies involved have pleaded guilty, making this case much less controversial than Western media anticipated.

Anti-monopoly law, which is hailed as the "constitution of the market economy" and a "charter of freedom," plays a fundamental role in guarding fair competition in a market economy. China has lagged far behind compared to the US, which enacted its anti-trust law in 1890, and South Korea, which introduced the same law in 1986. It is high time that China take a leap forward.

Companies which produce and sell similar products should be competitors, but if they collude to fix prices, this makes them no different than if they stole from their customers. Monopoly is one of the major reasons why imported cars always sell at a high price in China.

Tracing the 30-year history of the Chinese market economy, we can find that monopolies were not given much emphasis at the early stage. But in the past six years, the anti-monopoly law has started to take effect, sending several companies, especially in the liquor industry, onto the list of penalties. Besides cracking down on misconduct in terms of quality and taxation issues, Chinese authorities have begun to put more effort into clamping down on any monopoly, a higher level measure to keep economic order.

The 1.2 billion-yuan penalty has just demonstrated China's efforts to do more. Compared with the monopoly crackdowns in the US and EU, what China has done can only serve as a warning. The execution of anti-monopoly law will be expected to be much tougher in the future.

Anti-monopoly should be regarded as an integral part of Chinese reform. Following the anti-graft campaign, a modern social governance system will be carried forward, in which regulating the market economy is the priority. Monopoly as a misconduct or even violation of law is not known to the public very well, but it will be in the future.

China is establishing the rule of law, and anti-monopoly is of great value in this process. Currently, China's anti-monopoly campaign targets big companies which rack up profits by breaking the law. It will be a deterrent to others.

A mature anti-monopoly mechanism is one of the symbols of a highly developed economy. China is moving toward this end.

Posted in: Editorial

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