Kuang2016.Pdf
Total Page:16
File Type:pdf, Size:1020Kb
This thesis has been submitted in fulfilment of the requirements for a postgraduate degree (e.g. PhD, MPhil, DClinPsychol) at the University of Edinburgh. Please note the following terms and conditions of use: This work is protected by copyright and other intellectual property rights, which are retained by the thesis author, unless otherwise stated. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This thesis cannot be reproduced or quoted extensively from without first obtaining permission in writing from the author. The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the author. When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given. Competition Policy and State - Owned Ent erprises in Contemporary China Lei Kuang Doctor of Philosophy The University of Edinburgh 2016 DECLARATION This is to certify that that the work contained within has been composed by me and is entirely my own work. No part of this thesis has been submitted for any other degree or professional qualification. ____________________ Signature ____________________ Date ABSTRACT This thesis ex plores, first, the evolvement and implementation of competition policy in China, where a competition culture w as largely missing for decades ; and second, the extent to which the government has resolved the inherent contradiction between preserving state control and promoting competition. The main aim is to evaluate h ow a competition law, which is essentially a product of capitalist free market economy, is being applied in China, a socialist country where predominant state - owned enterprises ( SOEs ) together with their owner – the Chinese government – generate the most distortions to market competition. To achieve this aim, the thesis studies, first, the ongoing economic transition and the historical development of Chinese competition policy ; s econd, the prol onged drafting process of the Anti - Monopoly Law ( AML ) ; t hird, the substantive and institutional aspects of the enforcement of the AML, and the outstanding problems of the current competition system ; and f ourth, the role of the government in the interplay b etween competition policy and SOEs. The thesis also studies the European Union (EU) competition regime, which had substantial influence on the adoption of the AML and the design of China’s competition system. This discussion intends to use the experiences of the EU in modernising its competition system and in handling competition - related issues involving public enterprises to provide some meaningful answers to certain problems concer ning the application of the AML and to possible reform of competition syste m in China. i CONTENTS TABLE OF LEGISLATION............................................................... ...................... viii TABLE OF CASES......................................................................... ......................... xvi i LIST OF ABBREVIATIONS....................................................................... .......... xxv i i CHAPTER ONE INTRODUCTION ........... .......................................................................................... 1 1 General Introduction ............................................................................................... ..1 1.1 Background ........................... ................................................. ....................... ... 2 1.2 The Definition of SOEs ................................................. ... ............................... 5 2 Research Questions ..................................................................................... ............. 6 2.1 Research Question 1 ..................................................................................... ... 6 2.2 Research Question 2 ................... ............................................................... ... ... 8 2.3 Research Question 3........................................................................ ........... ..... 9 2.4 Research Question 4 ............................................... ...... ............................ ... ...1 1 3 Reasons for Introducing the EU Competition System ........................ ...................1 2 CHAPTER TWO HISTORICAL DEVELOPMENT OF ECONOMIC TRANSITION, COMPETITION POLICY AND INSTITUTIONS IN CHINA . ............................ 1 5 1 I ntroduction ............................................................................................................1 5 2 Pain in Seeking the Right Path ...................................................... .............. ......... 16 ii 2.1 China’s Planned Economy ............................................ .............................. ... 1 7 2 .2 Disastrous Social Upheaval ....................................................................... .. .. 19 3 An Era of Reforms and Rapid Development – Path Leading to a Chinese Competition System ......................................................................... ............................2 2 3 .1 Emergence of Competition in China’s domestic market ............................. .. 2 4 3 .2 Reform of State - Owned Enterprises .......................................................... .. 2 7 3 .3 The Emergence of Foreign Capital .......................................................... ... ... 3 3 3 .4 Accession t o the WTO ............................................................................... ... 3 6 3 .5 Dispersal of Competition - Related Laws .......................... ........................... .. 39 4 Institutionalisation of Reform in 2003 ................... .................. ..............................4 5 4 .1 Ministry of Commerce .......................................................................... ...... ... 4 6 4 .2 National Development and Reform Commission .................................. ....... 4 7 4 .3 State - Owned Assets Supervision and Administration Commission ............ 49 5 Conclusion ..................................................................................................... ......... 50 CHAPTER THREE THE DRAFTING OF THE AML ................................................... ......................... 5 3 1 Introduction ......................................................................................................... ...5 3 2 Law - making in China ............................... ..................................................... .........5 5 3 Drafting History of the AML ................................................................................. 59 3.1 Domestic Debates .................................................................................... ... ... .6 5 3.1.1 Did China need a competition law? .................. .......................... ... ...... 6 5 iii 3.1.2 What should be the proper scope of the AML? ... ......................... .. ... ... 6 6 3.2 Institutional Conflicts ......................................................... ........................ ... 72 4 Conclusion ............................................................................................. ............ .....7 7 CHAPTER FOUR THE APPLICATION OF THE AML TO MONOPOLISTIC CONDUCT ......... 80 1 Introduction ........................................................................................................... 80 2 Prohibition of Monopoly Agreements .......................................................... .......... 82 2.1 Enforcement against Cartels .......................................................... ... .............. 8 5 2.1.1 NDRC .................................................................. ...................... .......8 8 2.1.1.1 Japanese auto parts and bearing s cartels ............................. .. 8 8 2.1.1.2 Zhejiang insurance cartel ........................................... ........... .. 90 2.1.2 SAIC ................................................................... .............................. 93 2.2 Enforcement against Resale Price Maintenance ............... .......................... 95 2.2.1 Rainbow v Johnson & Johnson ............................... ......................... .. 9 6 2.3 Conclusive Remarks ....................................................... ........................... ... 100 3 Prohibition of Abuse of a Dominant Position ............................. ........................... 102 3.1 Qihoo 360 v Tencent .................................................................... .......... ... ... 10 5 3.1.1 Market definition ................................................. ........................ .. .. 10 6 3.1.2 Market power ................................................... .......................... .. ....10 7 3.1.3 Abusive conducts .................................................. ..................... .. ....1 10 iv 3.1.4 Implications of Qihoo v. Tecent ............................. .......... .. ......... .....1 12 4 Mergers and Acquisitions ..................................................... .................................. 1 14 4.1 The P3 Network ............................................... ....................................... ..... 1 18 4.2 MOFCOM’s Decision ..................................................... ............................ 1 1 9 4.2.1 Relevant market ................................................... ........ .. .................. 1 20 4.2.2 Competitive