Commentary by Professor Huang Yong, Drafter of China’s AML

[Huang Yong is Professor of Law at the University of International Business and Economics in Beijing, China. Professor Huang is also one of the drafters of China’s Antimonopoly Law.]

On the question of whether China’s Antimonopoly Law (AML) should regulate administrative monopolies – and whether it can effectively do so – Professors Mehra and Meng have given us an affirmative answer in a unique way. They first state that, while prohibiting administrative monopolies differs from conventional antitrust law in the U.S., both the U.S. and the EU deal with similar issues – which in the U.S. would be subject to Dormant Commerce Clause analysis and which in the EU would be covered under its competition law. In contrast to the pessimistic attitudes of some scholars, Mehra and Meng content that the provisions prohibiting administrative monopolies in the AML have active significance in and of themselves. First, they believe that these provisions will be clear statements that help the central government restrain regional protectionism. Second, they propose that the adoption of a clearer conduct standard plus the possibility of improved information about compliance could yield a domestic cooperative equilibrium like that of the international trade system Third, they believe that the AML can contribute to the development of a “competition law” culture in China even in the absence of strong enforcement mechanisms.

Mehra and Meng deserve praise for analyzing the AML in the context of China’s social and economic reality and identified its possible positive function, in contrast to the bulk of academic writing. However, in contrast to mature market-oriented countries, China is a transition economy with a strong tradition of government intervention in the economy. My view is that the AML is destined to be a transitional law and will suffer a lot of limitations. These limitations will ensure that regulation of administrative monopolies’ legal liabilities in AML will mainly be symbolic. From here, the task for China’s AML is first to cultivate and perfect market mechanisms, and then to safeguard market efficiency.