China announces it will wrap its three antitrust agencies into one authority

13 March 2018 1:08pm
Chinese Flag

🔊 Podcast: All together now: China brings antitrust enforcement under one roof at a brand new agency

Since China’s Anti-Monopoly Law came into force in 2008 until the present day, a ministry and two state agencies have overseen separate aspects of antitrust enforcement in the country. Now, a new super-regulator is about to make those subdivided roles all its own. MLex Asia Managing Editor David Plott hears from our China-based Market Analyst Eliot Gao why Beijing has shaken things up, and what’s in store.

13 March 2018. By MLex Staff.

China's government today announced a sweeping reorganization of the three agencies responsible for different aspects of antitrust enforcement into a single authority, in a move seen as enhancing competition regulators' stature and authority.

According to a draft institutional reform plan of the State Council — which is China's cabinet — the government will establish a national administration for market supervision in the new cabinet.

The new supervisory administration will combine the current Price Supervision and Antimonopoly Bureau of the National Development and Reform Commission, or NDRC, the Antimonopoly Bureau of the Ministry of Commerce, or Mofcom, and the Antimonopoly and Anti-unfair Competition Bureau of the State Administration of Industry and Commerce, or SAIC, according to the draft plan released today.

China’s competition enforcement is currently carried out by the NDRC, which deals with price-related antitrust matters, SAIC, which oversees non-price-related antitrust issues, and Mofcom, the country's merger regulator.

The plan suggests that the newly integrated authority will combine the antitrust investigation and merger review functions of the three existing agencies, and consolidate their personnel into a single department. That department will be housed within the national administration for market supervision.

“The reform of the market supervisory system is aimed at creating a united supervisory authority for markets, and establishing a united, open and competitive market order,” Chinese State Councilor Wang Yong said in an explanatory report on the reform plan presented to the National People's Congress, or NPC, today.

It is not clear who will be appointed minister of the new supervisory administration, and who will head the antitrust authority.

According to the draft plan, the antitrust authority will also include the Office of the State Council’s Antimonopoly Commission.

The move is part of a major government reorganization to streamline and improve functions of the new administration for national market supervision, which will also combine the functions of SAIC, the General Administration of Quality Supervision, Inspection and Quarantine, and the China Food and Drug Administration, according to the draft plan.

China's top leadership earlier this month announced its intention to strengthen enforcement of antitrust and anti-unfair competition laws, and to adjust the functions of the country's antitrust regulators.

In a government work report delivered to the NPC, Premier Li Keqiang outlined key tasks for 2018, including the breaking up of administrative monopolies and the prevention of market monopolies. This was the first time a Chinese premier has spoken in an official government work report about antitrust issues and the need to break up monopolies, raising hopes that antitrust enforcement will be more robust in the future (see here).

Local antitrust advisers and academics have been calling for years for the consolidation of the three bodies that enforce antitrust rules into a single authority as a way to dramatically boost antitrust enforcement, legal observers said.

Specifically, it would improve the overall efficiency and coherence of antitrust enforcement, because the current three-agency enforcement regime has been plagued by a waste of enforcement resources, resulting in case-processing delays.

- Analysis by Eliot Gao