The Ministry of Commerce has set up an anti-monopoly office, to give teeth to legislation and to strengthen investigations into monopolies.

The office, a temporary mechanism, is responsible for helping draft upcoming anti-monopoly law, and for related investigations and international communications on prevention of monopolies.

Shang Ming, director of the ministry's treaty and law department is head of the office.

Shang said the office will focus on work to establish a unified and open national market.

A draft of the anti-monopoly law was submitted to the State Council's Legislative Affairs Office in March and distributed to related departments and local governments for comment.

The law is listed on the legislative agenda of the 10th National People's Congress in its five-year tenure, which ends in 2008, but the draft will still have to undergo further revision.

Analysts say the special office is the latest effort by the ministry to speed up the process.

Wang Xiaoye, a researcher at the institute of legal studies of the Chinese Academy of Social Sciences, said the establishment of the office indicated that work on curtailing monopolies is one of the most important tasks for the ministry at present.

Drafting of anti-trust law has been going on for a decade, but there have been numerous revisions because of controversies.

"While China's economy is opening wider and is more market-oriented, the absence of such a law is proving to be a source of major concern," Wang said.

Some multinational companies are exploiting the situation and abusing their dominant position to curb competition, warned a report from the State Administration for Industry and Commerce, which called for the legislative process to be accelerated.

Assistant Minister of Commerce Huang Hai said earlier that local protectionism is serious in China and threatens the establishment of a national market system.

Huang said many local governments have a huge stake in fostering a number of local enterprises as their tax base and source of financial revenue and consequently erected barriers to prevent outsiders from entering local markets.

"The office also means power to crack down on monopolistic behavior will be strengthened," Wang said.

The office can curb such activities by relevant provisions in the law about unfair competition, price law, bid and tender law, provisional rules on mergers with and acquisitions of domestic enterprises by foreign investors, and other department rules, Wang said.

Analysts estimate the office will be the administration to monitor monopolies when the law is passed, though the ministry says it is temporary.

The latest version of the anti-monopoly draft law has dropped an article about setting up an independent anti-monopoly administration.

The Ministry of Commerce which has power over foreign and internal trade seems to be the most suitable authority.

But the State Administration of Industry and Commerce also has some power in the area since it oversees the implementation of the Law Against Unfair Competition, which has stipulations about monopolies.

The administrative level of the specific department responsible for implementating the law has not been decided.

(China Daily September 17, 2004)