China says only 'heavy punches' will dent rising monopoly behavior

Tue Sep 24, 2013 7:03am EDT
 
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By Xiaoyi Shao and Michael Martina

BEIJING (Reuters) - A heavy-handed approach is needed to halt a rise in monopolistic behavior by companies in China, a senior official said on Tuesday, in a sign that an antitrust campaign which has already ensnared top global firms could get tougher.

"Only heavy punches will work," Xu Kunlin, head of the anti-monopoly bureau at the National Development and Reform Commission (NDRC), told a business forum in Beijing.

"It's easy to find evidence on many firms' monopolistic behavior in China," Xu said in his speech. "Some of it could be found on the Internet," he added, noting the ease of discovery was the reason why investigations had been so successful.

The NDRC is China's top economic planning body but it also regulates prices. It has launched a spate of antitrust investigations across sectors ranging from pharmaceuticals to milk powder and jewellery in recent months. In particular, authorities are paying attention to whether manufacturers are forcing retailers to set minimum prices for products, which would contravene a 2008 anti-monopoly law.

China's leaders are trying to restructure the economy to one where growth is driven by consumers, and while Xu did not mention any specific companies or industries, he said investigations would focus more on sectors affecting the lives of ordinary people. He added that competition policy should be a key economic policy area for China.

Speaking later to Reuters, Xu said authorities had some targets for future investigations, but he declined to give specific details.

Antitrust experts cautioned, however, that while Xu's rhetoric sounded serious, it was still too early to say whether it would translate into benefits for consumers.

"Obviously, he's a senior enforcer in the government and what he says, if it's followed through, would have a significant effect, and hopefully a beneficial one," said Mark Williams, a law professor at Hong Kong Polytechnic University.   Continued...