On Monday a senior Ministry of Commerce (MOFCOM) official rebuked media speculation over government bodies jockeying for position regarding a new antimonopoly law.

A Beijing newspaper recently reported that legislation had reached a stalemate as MOFCOM, the State Administration for Industry and Commerce and the National Development and Reform Commission were "vying for a leading role" in drafting the code, which has been dubbed an "economic constitution."

But an official from MOFCOM's Treaty and Law Department said the report was "unfounded" and that they sent a finished draft to the State Council last March. The next step is to put it before lawmakers in the Standing Committee of the National People's Congress (NPC).

The draft law contains articles that would regulate monopoly agreements, abuse of dominant market status, large-scale mergers and administration-backed monopolies.

Curbing monopolies has been one of MOFCOM's key assignments since the NPC formed it in 2003, although it did ask related State Council departments and local governments for comments on the draft, he said.

"Any new legislation would not affect existing monopolies unless they sought to trample market competition by taking advantage of their status," said Huang Yong, law professor at the University of International Business and Economics.

Huang said sensational reports saying the law would target big multinationals had missed the point.

But he said there were a number of problems with the draft, which may cause difficulties when it comes to implement it.

One major concern is that no specific agency is named to exclusively rule on monopoly cases. Instead, it empowers MOFCOM to deal with mergers and administrative acquisitions, the State Administration for Industry and Commerce to look into monopoly agreements and abuse of market dominance, and the National Development and Reform Commission to supervise price agreements and bid rigging.

"It needs effective coordination to deal with monopoly cases, which often involve protectionist local governments or giant companies. Obviously an independent and powerful administrative or quasi-judicial agency is more suitable than several antimonopoly offices in separate departments," said Huang.

The State Administration for Industry and Commerce warned in a report last May that some multinational companies were abusing their dominant positions in the Chinese market to curb competition, and pressed for early legislation.

The law is on the legislative agenda of the 10th NPC, whose tenure ends in 2008. Legislative procedures allow the State Council to propose laws to the top legislature, whereas drafts are often written by ministries concerned.

(China Daily January 12, 2005)