The drafting of antitrust guidelines for the nation's vehicle industry, led by the National Development and Reform Commission, the top economic planner, is set to be completed within the year. If nothing unexpected happens, the long-awaited guidelines will take effect next year, according to sources close to the matter.

Over the past two years, a host of automakers have been fined for antitrust violations. The most recent case involved penalties being imposed on Dongfeng Nissan, one of Nissan Motor Co's joint ventures in China, and its dealerships in Guangzhou, South China's Guangdong Province, for price-fixing. The fines, normally hefty, have been well-received by the public.

But it should be understood that for an open and transparent market to be established, and for consumers' rights to be fully protected, it is not enough for the government to crack down on antitrust violations. There should also be an improved legal framework for effective oversight of the market.

Anti-competitive practices in the vehicle sector include both vertical monopolies, which involve different producers, and horizontal monopolies, which include manufacturers and dealerships.

Vertical monopolies in particular pose complicated issues when it comes to scrutiny by consumers and law enforcement by antitrust agencies. Having said that, the upcoming antitrust guidelines will raise awareness around the terms of antitrust violations in the auto sector by fleshing out and clarifying the rules and therefore prompting increased compliance with the law by market participants.

The new guidelines could also increase the credibility of the government's antitrust efforts. In recent years, government departments at both the central and local levels have applied antitrust measures to automakers.

But these attempts have also raised doubts about the appropriate use of power by these departments, the fair use of discretionary power and whether some producers are being unfairly targeted. The EU and US have also claimed that China's antitrust actions are intentionally targeting foreign-invested enterprises.

I believe that all these doubts and claims are groundless. But if antitrust rules can be clarified and codified, the government can avoid doubt and criticism of its antitrust efforts. Antitrust actions that are based on a firm legal foundation will be accepted by the world at large.

It should also be noted that the ultimate goal of enforcing antitrust rules is to create a clean market environment, reduce the profits earned through antitrust violations and enhance the wellbeing of consumers. Imposing fines only provides a limited benefit to consumers, even though fines do have a deterrent effect on producers.

Only by having a well-established legal framework can there be an orderly and highly efficient vehicle market in China. Coupled with lower prices and better services, this could spur car sales and help the industry survive this downturn.

The author is Liu Bo, a commentator at the 21st Century Business Herald. bizopinion@globaltimes.com.cn