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Transplanting Antitrust in China: Economic Transition, Market Structure, and State Control

Wentong Zheng, University of Pennsylvania Journal of International Law, Vol. 32, No. 2, 2010; SSRN January 1, 2011

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Readers vote is closed since March 1st, 2012. Readers’ vote has nominated 2 articles for each of the Awards. This short list has been communicated to the Board, with the articles nominated by the Steering Committees. The Board will decide on the award-winning articles on March 27, at the Awards ceremony to take place in DC. See vote results online here.

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This Article examines the compatibility of Western antitrust models as incorporated in China’s first comprehensive antitrust law – the Antimonopoly Law (“AML”) – with China’s local conditions. It identifies three forces that shape competition law and policy in China: China’s current transitional stage, China’s market structures, and pervasive state control in China’s economy. This Article discusses how these forces have limited the applicability of Western antitrust models to China in three major areas of antitrust: cartels, abuse of dominant market position, and merger review. Specifically, it details how these forces have prevented China from pursuing a rigorous anti-cartel policy, how they have led to a mismatch between monopoly abuses that are prohibited under the AML and monopoly abuses that are most prevalent in China’s economy, and how they have prevented the merger review process under the AML from being meaningfully applied to domestic firms. This Article demonstrates that despite having a Western-style antitrust law, China has not developed and likely will not develop a Western-style antitrust jurisprudence in the near future due to these local conditions. Finally, the Article explains how China developed a consensus on the need for a formal antitrust law despite local conditions that were not entirely compatible with such a law.

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