1. Current Position

Recognizing that successful implementation of competition policies is premised upon the development of a socialist market economy, the Chinese government is now embarking on the property rights reform of the state-owned enterprises. To separate government activity from business management and institute a genuine corporate system, a number of measures have been taken to create wholly-state-owned companies on a limited scale, support private and collective businesses, steadily transform the SOEs into joint stock companies, and encourage qualified enterprises to issue shares abroad.

In 1980, China's State Council promulgated the Regulations on Development and Protection of Competition, which is China's first specific regulation on competition. Later, several regulations and rules relating to competition were issued and implemented in 1980s'. In 1993, the People's Congress of China adopted "The Law of the People's Republic of China for Countering Unfair Competition". The acts of unfair competition prohibited by the law are summed up as follows:

• to deceive consumers by passing off a register trade marks of another person, etc.;
• to abuse administrative powers;
• to force others to by goods designated by public utility enterprises or enterprises having monopoly status;
• to make tie-in sales;
• to sell products with prizes attached by fraudulent methods or bribery;
• to damage competitor's reputation by falsehood;
• to squeeze competitors out by selling goods at price below cost; etc.

In addition, "the Law of the People's Republic of China for Protecting Consumer's Rights and Interests" was promulgated in 1993. Specific local regulations on countering unfair competition were also promulgated in Beijing, Shanghai and Wuhan etc. In 1997, "Regulations on Anti-dumping and Anti-subsidization" was promulgated by the State Council.

The Administration for Industry and Commerce of China (AIC) at all levels is the agency for enforcing the above countering unfair competition law. The concrete punishment rendered against activities of unfair competition include ordering to stop illegal acts, confiscating illegal proceeds; imposing a fine of less than 3 times the amount of illegal proceeds, revoking the business license or being prosecuted for criminal liability.

Up to now, the AICs have handled more than ten thousand unfair competition cases in China, with more and more judicial precedents being set. Typical cases are publicized by Chinese media to promote public awareness of the law for countering unfair competition.

China's first anti-trust law, protecting commercial secrets law and the implementation regulations of the law for countering unfair competition are in the process of intensive drafting.

2. Objectives

Short-term (1997--2000):

• Review the laws and regulations on countering improper competition and unfair trading activities;
• Draft and enact the law and regulations concerning anti-monopoly, perfect the legal system, e.g. strengthening the drafting and research work on the anti-trust law;
• Draft and promulgate relevant regulations concerning anti-dumping, countervailing and safeguard measures;
• Enhance the legal exchange concerning the fair competition with other APEC economies or international organizations. Study the advanced experience of other APEC economies;
• Enhance the enforcement and supervision of laws and regulations, e.g. strengthen the supervision on the price, quality and measure. Crack down on the illegal activities of producing and selling fake and inferior commodities, take strong activities of producing and selling fake and inferior commodities, take strong measures against fraudulence and monopoly over price. Protect the producer and consumer's legitimate rights and interests; and
• Enhance the training for relevant personnel.

Mid- and Long-term (2011--2020):

• Transform the traditional planned economy system into market economy system. Reorganize the state-owned enterprise by way of joint operation, merger and joint stock cooperation in order to make them become the true competitive participants in the market. Set up a market system with unified, opening and fair competition;
• Through the legal and economic methods, regulate the market circulation order, break the regional blockade and sector separation; and
• Further perfect the legal system in order to meet the needs of the Chinese market economy and world economic development.