Compete if you can

27 Oct 2009 By John Foley Follow @johnsfoley

Individual customers are taking on China s biggest domestic firms, but the antitrust regime has been more visible in shackling foreigners like CocaCola, ABInbev and GM when they bid for Chinese assets. The halfbaked regulatory framework risks preserving a stodgy state sector.

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China Mobile paid out $146 to a customer in a test case for China's antimonopoly regime, which took effect in August 2008. The telecoms operator settled the claim, which accused it of penalising contract customers by charging them a fee not levied on payasyougo clients.

A court rejected another private case brought against Shanda, the online portal. Further test cases are ongoing against companies including Sinopec, the stateowned oil producer.

Antitrust procedures are led by three separate ministries in China. The Ministry of Commerce (Mofcom) monitors takeovers, while the National Development and Reform Commission (NDRC) and the State Administration for Industry and Commerce (SAIC) look at market practices and pricing.

China's antimonopoly rules were invoked when CocaCola's bid for Huiyuan fruit juice was rejected in March by Mofcom. They have also been used to place conditions on other crossborder deals, including Inbev's acquisition of rival brewer Anheuser Busch, and General Motors' investment in carparts maker Delphi.

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A court rejected another private case brought against Shanda, the online portal. Further test cases are ongoing against companies including Sinopec, the stateowned oil producer.

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