Antitrust probes safeguard competition, tap potential

Intensive investigations into monopoly practices in China have highlighted the country's determination to nurture competition and use market forces to shore up growth.

In contrast to the lackluster performance of antitrust enforcement during the four years since the implementation of the antimonopoly law in 2008, antitrust authorities have cranked up their efforts this year to eradicate monopolies and breed competition.

"Ensuring full competition has become a major task in our economic restructuring," said Zhang Yansheng, secretary-general of the Academic Committee of the National Development and Reform Commission (NDRC).

"The frequent attacks on monopolies show a clear intention from the country's new leadership to deal with the economic slowdown through a more competitive and fair market," said Wang Yong,professor at the school of international studies, Peking University.

The world's second-largest economy has investigated and fined LCD makers, alcohol producers, pharmaceutical companies, milk powder firms and gold stores, sending a clear signal to the market that price-fixing by foreign or domestic investors will not be tolerated.

On the radar for future investigation are the petroleum, telecommunications, banking and auto sectors, said Xu Kunlin, head of the antimonopoly bureau of the NDRC.

In 2011, an investigation began into anticompetitive practices by China Telecom and China Unicom. The two telecommunication behemoths are widely perceived by a disappointed public as having evaded censure, though Xu said last December that the case was not closed.

"Investigating these usually state-owned giants is a crucial juncture for our economic reform," Zhang said.

There are long-standing and widespread complaints about lack of transparency and inflated prices by big names such as Sinopec and China Unicom. Slow moving investigations have undermined public confidence in authorities' determination to end monopolies in the face of vested interests.

"Some companies have been resisting competition under the pretext of national security," said Wang.

"Antitrust moves and national security are not contradictory. In fact, promoting competition means better services, which are conducive to national safety." Wang added.

Although scrutiny of these heavyweights is inevitable as China becomes increasingly adept at wielding the weapon of antitrust regulations, for Zhang, a level playing field is more important.

"Competitive neutrality is what we must strive for," Zhang said, adding that only when all players - state or private companies, foreign or domestic - are required to respect market rules will there be a sound market mechanism that is fair, regulated and transparent.

"Antimonopoly efforts will ensure market order. We must spare no pains in the battle against market malpractice," Zhang said.