The Private Enforcement of Anti-Monopoly Law in a Transitional China: an Analysis from Economic and Comparative Perspectives
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THE PRIVATE ENFORCEMENT OF ANTI-MONOPOLY LAW IN A TRANSITIONAL CHINA: AN ANALYSIS FROM ECONOMIC AND COMPARATIVE PERSPECTIVES BY YING XUE DISSERTATION Submitted in partial fulfillment of the requirements for the degree of Doctor of the Science of Law in Law in the Graduate College of the University of Illinois at Urbana-Champaign, 2012 Urbana, Illinois Doctoral Committee: Professor Nuno Garoupa, Chair Professor Amitai Aviram Professor Dhammika Dharmapala Professor Xin He ABSTRACT From economic and comparative perspectives, this dissertation discusses the problems relating to the enforcement of Chinese AML in general and private enforcement in particular; and argues that an effective antitrust enforcement is an inherent requirement of China’s sustainable economic development, but China should identify the proper role of private antitrust enforcement by looking at 1) the relationship between law enforcement and other policy tools such as advocacy and education, and 2) the relationship between public and private enforcement, given China’s developmental stage. China should also draw particular attention to the sequencing and pacing of reforms and the optimal level of enforcement. ii To Chuanhai, Father and Mother iii ACKNOWLEDGEMENTS I would like to give a very special thanks to my advisor Nuno Garoupa. It is his trust of my potential capability to introduce modern Western methodologies to the research of Chinese issues and expose more Chinese topics to international academic communities that first inspired me to dare to dream. I feel especially fortunate to have such a patient and gracious doctoral committee. Many thanks to Dhammika Dharmapala for his wisdom and courage, Frank Xin He for his quiet but unwavering support and to Amitai Aviram for his encouraging words. Here, I especially want to say thank you to all the wonderful professors at the University of Illinois and outside the U.S. who have motivated me to be a better scholar, teacher and person. I truly appreciate Dan Shao for her wisdom, kindness and inner strength. She has set a role model of a female scholar who can wisely balance major elements in life, such as personal life, work, gender, and expansion of research areas. Charlotte Ku is an amazing Dean and mentor in my four years of life in the U.S. I want to express my gratitude for her generosity of her time and advice when I was standing at each crossroad. Tom Ulen is one of the best teachers I've ever known. His heuristic teaching and probing questions have always pushed me to reach the outer limits of the intellectual horizon. My esteem goes to Xiaoye Wang for her generous help and advice regarding Chinese antitrust issues in general and my field work in Beijing in particular. I have had the privilege to work with the most dedicated and supportive people at the College of Law. I want to especially express my warmest gratitude to Christine Renshaw, Ann Perry and Athena Newcomb for being so patient with me and answering all my emails throughout the years. They have helped me so much more than they realize. This dissertation wouldn’t have found its way here in front of you without the many people who’ve walked alongside me. No words can ever express my appreciation to all those who have mentored me, shared their experiences with me, and touched my heart. I would like to thank Jing Jing Chang, Lawrence Chang and Erji Wang for their priceless iv friendships. They have always provided me with insightful academic discussions and honest care in the past four years. And finally, I would like to especially thank my colleagues Tzu-Te Wen, Ye Feng, Jing Chen, Shiyun Zhang, Yawen Li and Jin Kong for their valuable advice and encouragement regarding my life and work. The places that I’ve lived in have definitely shaped how I see the world. Thank you, Champaign, the starting point of my life in the U.S. Thank you, Ji'nan, my hometown. To my family, this dissertation is to my dear husband, for his generous emotional and financial support of my overseas study, and to my parents for their great courage and understanding of my American dream. And finally to my uncles and aunts, for your persistent and warm-hearted help with my parents. Thank you. v Table of Contents CHAPTER 1: INTRODUCTION ....................................................................................................... 1 CHAPTER 2: DOES CHINA NEED ANTI-MONOPOLY LAW: A BASIC INQUIRY ....................... 8 CHAPTER 3: THEORIES ABOUT ANTITRUST ENFORCEMENT AND THE CASE OF CHINA ............................................................................................................................................ 37 CHAPTER 4: EXPERIENCE OF REFERENCE COUNTRIES: A COMPARATIVE ANALYSIS.................................................................................................................................... 158 CHAPTER 5: ENFORCEMENT STRATEGIES WITH CHINESE CHARACTERISTICS—POLICY SUGGESTIONS ............................................................................................................................ 227 CHAPTER 6: CONCLUDING REMARKS ................................................................................... 242 ACRONYMS ................................................................................................................................ 244 BIBLIOGRAPHY .......................................................................................................................... 246 APPENDIX ................................................................................................................................... 269 vi CHAPTER 1: INTRODUCTION The comprehensive achievements of China’s reform in the past thirty years cannot be derogated. On economic reform, China has maintained a record average annual GDP growth rate of ten per cent; in 2010, China’s economy escalated to the second largest in the world;1 and broke into the league of upper-middle-income countries with a GDP per capita of about $4000.2 Meanwhile, China is expanding the steady steps towards further regional and international integration,3 and has become the largest merchandise exporter, second largest merchandise importer, fifth largest outward investor, second largest recipient of foreign direct investment (FDI), and largest holder of foreign exchange reserves.4 On the political side, the construction of state institutions has formed the core of China’s political reform. 5 China has undergone rounds of administrative restructuring, 6 launched massive market-oriented legislations, and achieved direct election of deputies to the People's Congress at county level, village self-government, and multi-candidate election of the Central Committee of the Chinese Communist Party 1 China Overtakes Japan as World's Second-biggest Economy , B BC NEWS BUSINESS , Feb. 14, 2011, available at http://www.bbc.co.uk/news/business-12427321 (last visited Mar. 25, 2012). 2 Beware the Middle-income Trap: China’s Roaring Growth Cannot Last Indefinitely , T HE ECONOMIST , Jun. 23, 2011, available at http://www.economist.com/node/18832106 (last visited Mar. 25, 2012). Economies are divided according to 2010 GNI per capita, calculated using the World Bank Atlas method. The groups are: low income, $1,005 or less; lower middle income, $1,006 - $3,975; upper middle income, $3,976 - $12,275; and high income, $12,276 or more. See How We Classify Countries , WORLDBANK.ORG , available at http://data.worldbank.org/about/country-classifications (last visited Mar. 25, 2012). 3 China accessed the WTO in 2001 and was now actively involved in regional groupings such as the 10+1 (ASEAN-China), 10+3 (ASEAN-China, ROK, Japan), SCO, Greater Mekong Sub-region Cooperation (GMS), Pan-Beibu Gulf Economic Cooperation, Central Asia Cooperation and Greater Tumen Initiative in Northeast Asia. See Wang Hui, Regional Integration Key to Growth , C HINA DAILY , May 27, 2010, available at http://www.chinadaily.com.cn/opinion/2010-05/24/content_9883054.htm (last visited Mar. 25, 2012). For an opinion from geopolitical point of view, see Li Qingsi, Regional Integration En Route , , C HINA DAILY , Jan. 25, 2010, available at http://www.chinadaily.com.cn/opinion/2010-01/25/content_9369501.htm (last visited Mar. 25, 2012). 4 UNCTAD , WORLD INVESTMENT REPORT 2011 , http://www.unctad-docs.org/files/UNCTAD-WIR2011-Full-en.pdf (last visited Mar. 25, 2012). 5 It is open to debate whether there is a political reform in China. In international academic and policy-making circles, a popular viewpoint is that “China only conducted economic reform and not political reform.” This argument was first made by Susan L. Shirk in the early 1990s and then became popular in academia. See Cheng Yung-nien, The Chinese Model of Development: An International Perspective , 31 SOC . SCI . IN CHINA 44 (2010). I take the standpoint of Cheng that the key to understanding this point is how one defines political reform; without some form of political reform, no matter how flawed it is, one cannot imagine how today’s China could have come a long way from being a completely command and control economy. 6 新中国成立以来的历次政府机构改革 [Government Restructurings after The Foundation of The PRC ], XINHUA NETWORK , Feb. 26, 2008, available at http://politics.people.com.cn/GB/1026/6923277.html (last visited Mar. 25, 2012). 1 (CPC).7 All these institutional improvements have provided the necessary supporting environment for the takeoff of economic growth: basic social and political order, basic social justice, and basic protection of property rights.8 Outstanding