1. Brief Introduction to China's Legislation of the Competition Law

Since the China's open door policy in 1979, competition mechanism has played in increasingly important role in the Chinese economy, and the work of legislation on competition has also developed gradually along with the economic development. In 1980, the State Council promulgated the Regulations on Development and Protection of Competition, which is the China's first regulation on competition particularly. Later, several regulations and rules relating to competition were stipulated and implemented in 1980s, and all of them are rules made by administrative agencies. In 1993, the Standing Committee of the People's Congress adopted "the Law of the People's Republic of China for Countering Unfair Competition", which indicated a new stage in the development of legislation on competition in China.

China's Unfair Competition Law is drafted based on the summary of various issues occurred in acts of unfair competition by Chinese companies in their business operations and transactions, the experience of enforcement with respect to countering unfair competition and successful practice and examples of other countries. And the purpose of the Law is to safeguard the healthy development of China's economy and to protect the lawful rights and interests of operators and consumers.

Acts of unfair competition prohibited by the Law are summed up as follows:

1. To deceive consumers by passing off a register trade marks of another person, using without authorization, specific name, packaging, decoration of well-known goods, forging or falsely using symbol, etc.;
2. To abuse administrative powers; (Art. 7)
3. To force others to buy goods designated by public utility enterprises or enterprises having monopoly status;
4. To make tie-in sales;
5. To sell with prizes attached by fraudulent methods;
6. To buy or sell goods by means of bribery;
7. To submit tenders in collusion with one another;
8. To damage competitor's reputation by falsehood;
9. To squeeze competitors out by selling goods at price below cost;
10. To infringe other's business secrets.

In China, Industrial and Commercial Administration Department is the agency to enforce the law for countering unfair competition. The punishment rendered against activities of unfair competition are : e.g. 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.

After the promulgation of the Law, the industrial and commercial agencies have handled more than ten thousand unfair competition cases overall China. The Chinese government will strengthen the enforcement and complete its competition policy and law step by step in order to protect the fair competition in China's economy.

2. The Features and Development of the China's Competition Law

The features and development of the China's competition law is closely related to the features and development of China's economy. Since 1970s, China's economy has undergone a deep reform from the planned economy to the market economy. The controls of the economy by the government has also changed gradually from the central direct control to a system with laws and macroeconomic readjustment as main methods of control. As the opening of the Chinese market to the outside world, the competition between enterprises becomes more and more severe, and lots of unfair competition has emerged.

On the other hand, China's economy is still a developing one. The business operations of most Chinese enterprises are still not in a reasonable scale, their economic efficiency are rather low, and the capacity in participating the competition in the world market are still limited. In most industrial fields, enterprises and companies are still in a scattered and backward condition and overcompetition exists, and this has a severe impact on the developing pace and quality of the relevant industries.

Because of the characteristics of China's economy, China's Countering Unfair Competition Law has the following features :

1. Scope of regulation

"The Law of the People's Republic of China for Countering Unfair Competition" was drafted based on the actual needs of our economic development, laying particular emphasis on countering acts of unfair competition, and leaving the monopoly and restriction of competition to the Anti-trust Law, which is under drafting now.

On the other hand, the Law has included the acts of administrative power abusing, which hinder the market development, such as agency monopoly and regional restriction. And also, the acts of public utility enterprises or other operators having monopoly status abusing their power are fallen within the regulating scope of the Law.

2. Department in charge

In order to execute the law for countering unfair competition, many countries not only depend on their judicial organs, but establish specialized agency in charge of the matter. China has no such specialized agency, but entitles the Bureau of Industrial and Commercial Administration to exercise this power.

Since it's very complicated and difficult to monitor the market and identify the acts of unfair competition, the limits of authority of different agencies with respect to enforcement are also stipulated concretely by the Law. For example, the industrial and commercial administration agencies are in charge of the acts done by enterprises; and with regard to the acts of government agencies, the department in charge of enforcement will be the competent authority at the higher level of the above-mentioned agencies.

3. Remedies

The Law gives injured parties the administrative remedy as well as the judicial remedy, to stop acts of unfair competition and protect competition.

Using administrative measure as the main form of remedy was closely related to China's own conditions and traditional cultural and legal background. Administration remedy is more simple and efficient compared with the judicial remedy, and has been used to settle disputes for a long period in our country.

The drafting of China's first anti-trust law is going on intensely. We will keep our characteristics and needs in mind, and learn the experience of other economies in their legislation of anti-trust law as well during the drafting of the law. At the same time, we will strengthen the exchange and cooperation with other economies to adapt ourselves to the needs of a more opening environment of regional economy and international economy.

3. The Relationship between Competition Policy and Anti-dumping Issue

As the APEC Economic leaders declared in Bogor in November 1994, "with respect to our objective of enhancing trade and investment in the Asia-Pacific, we agree to adopt the long-term goal of free and open trade and investment in the Asia-Pacific. This goal will be pursued promptly by further reducing barriers to trade and investment and by promoting the free flow of goods, services, and capital among our economies". And also in the Section A: General Principles of the Osaka Action Agenda says "The APEC liberalization and facilitation process will be comprehensive, addressing all impediments to achieving the long-terms goal of free and open trade and investment." Therefore, in line with Bogor Declaration and Osaka Action Agenda, we should try to reduce all barriers to trade and investment to achieving the APEC goal. And we think that anti-dumping issues should be given proper attention and be included in the Competition Policy and Law. The reasons are as follows : first, no place or item address anti-dumping and countervailing issues in the Osaka Action Agenda; second, in the future development of world trade and investment, anti-dumping will be used by more countries and APEC members to protect fair competition, which is consistent with WTO. The problem is that anti-dumping measures should be adopted properly for fair competition, but not to abuse the right for trade protection, for example, with respect to the investigation of anti-dumping cases from July 1994 to June 1995 around the world, more than half of the cases were initiated by the APEC members and with the same proportion against the APEC members; third, in respect of anti-dumping, there is a strong need for APEC to improve understanding through information exchange and promote dialogue and study, and the transparency of laws, regulations and administrative procedures need to be strengthened.

Misunderstanding often happens, therefore we think that the issue of anti-dumping should be considered in competition policy, which is in conformity with the objective of Competition Policy, "APEC economies will enhance the competitive environment in the Asia-Pacific Region by introducing or maintaining effective and adequate competition policy and/or laws and associated enforcement policies, ensuring the transparency of the above, and promoting cooperation among APEC economies, thereby maximizing, inter-alia, the efficient operation of markets, competition among producers and traders, and consumer benefits".

4. The Relationship between Competition Policy and Deregulation

The two subjects have very close linkages and connections, and many areas overlap. In addition, the content of Deregulation overlaps with other subjects, such as tariffs (progressively reducing tariffs), non-tariff measures (progressively reducing non-tariff measures, import license, import and export quota, etc.), services (progressively reducing restrictions on market access for trade in services and providing most favoured nation treatment and national treatment), investments (liberalizing investment regions and the overall APEC investment environment), mobility of business people. And it is difficult to define the areas or issues over which competition policy or deregulation should cover. Thus, it is necessary to avoid duplication and overlapping in our work, especially action plan.

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