Newsletter on Chinese Antitrust 04.11-10.11.2023

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Newsletter on Chinese Antitrust 04.11-10.11.2023

Review № 29 of Chinese Antitrust News from the Experts of the BRICS Competition Centre

- Gan Lin resigned as Head of the State Anti-Monopoly Bureau of China
- Xi Jinping urged to improve the supervision mechanism for natural monopoly networks
- China launches PubScholar public database- Statistics on M&A deals agreed without prescriptions
- Ministry of Commerce to eliminate discrimination against foreign capital
- China puts forward the initiative of international science and technology cooperation

Gan Lin has resigned as Head of the State Anti-Monopoly Bureau of China

By decision of the State Council of China, Gan Lin no longer holds the posts of Deputy Head of China's General State Administration for Market Regulation and Head of the State Anti-Monopoly Bureau. She will now serve as permanent Vice-Chairwoman of the China Consumers Association.

Both posts Gan Lin has held since the departments were founded — the market regulator in 2018 and the anti-monopoly regulator in 2021. Information on her successor is not yet available.

Sources:  Gov.cnWeixin

Xi Jinping urged to improve the supervision mechanism for natural monopoly networks

The Chinese President made the announcement at a meeting of the Central Commission for Comprehensively Deepening Reform, where he approved a series of guidance documents, including "Guidelines on the Implementation of Strengthening the Systems and Mechanisms for Supervision and Regulation of Natural Monopolies." Industries such as electricity, gas and oil or railways are naturally monopolies due to their networks, but also play a key role in the country's economy. It is necessary to strengthen public sector control over natural monopolies, increase public capital investment in network infrastructure, improve network security and reliability, and motivate companies to fulfill their subject responsibility. It is also necessary to closely monitor their monopolistic and competitive practices to ensure that the benefits of monopoly power are not spread to other links in the chain.


China launches public database PubScholar

The National Science Library of the Chinese Academy of Sciences (CAS) has launched an academic platform PubScholar — currently hosting about 170 million materials, of which the full text of 80 million (including journals, dissertations, patent literature and scientific data) is available to users for free. The platform provides such services as search of academic resources, acquisition, exchange and sharing of content. Its goal is to form a domestic hub of high-quality publicly available materials.

The launch comes against the backdrop of significant violations in the activities of the largest Chinese database of scientific articles China National Knowledge Infrastructure (CNKI): according to the results of investigations, fines amounted to ≈$6.8 million for cybersecurity violations and ≈$13 million for abuse of dominant position.

Sources: XinhuaPubscholar

Statistics on M&A transactions agreed without prescriptions

In the first 10 months of 2023, SAMR has agreed 605 economic concentration transactions without prescription. The Office notes five main features:

1) 547 transactions (90%) were reviewed on a simplified basis;

2) Chinese companies were the most frequent parties to the transaction (344 cases, 57%), followed by M&As between foreign companies (193 cases), while there were only 68 transactions between Chinese and foreign companies;

3) the majority (236 cases, 39%) were in the manufacturing sector of the real economy. Next in the ranking are retail trade, transportation, electricity, gas and water supply, real estate, information technology services;

4) 312 transactions are horizontal (with industry competitors), 248 - vertical (suppliers with consumers);

5) the place of registration of Chinese companies was most often Shanghai and Beijing cities, as well as Guangdong and Zhejiang provinces, and foreign companies were registered in the USA, France and Japan. 

The agency states that it adheres to the principle of "compliance ex ante, verification in the moment, pursuit of liability ex post" in regulating economic concentration transactions.

Source: SAMR

Ministry of Commerce will eliminate discrimination against foreign capital

The Commerce Ministry said it would campaign to revise rules on unfair differential treatment of Chinese and foreign capital. It will eliminate various regulations and policies that contain provisions that may discriminate against foreign-invested enterprises, so as to stabilize foreign investors' confidence in long-term investments in China. Applying a differentiated approach means, among other things, limiting access to certain industries, creating obstacles to doing business, introducing restrictions on foreign brands, subsidizing the purchase of goods of your own brand, setting a lower score for foreign companies when evaluating tender projects, and providing targeted grants and subsidies to Chinese companies, etc.


China has put forward an initiative for international scientific and technological cooperation

For the first time, China took the initiative for international scientific and technological cooperation, calling on countries around the world to engage in open, fair, impartial and non-discriminatory cooperation. It is proposed to follow the principle “Science knows no state borders and serves the benefit of all mankind” and to form a scientific and technical “community of a common destiny.” The initiative implies improving global governance in the scientific and technological field, strengthening the protection of intellectual property, strengthening cooperation in the field of scientific and technological innovation, free circulation of innovative personnel and resources on a global scale, supporting the equal right of all countries to participate in international scientific and technological cooperation.


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