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Development of a Legal and Policy Framework on Competition

Author: 
Peng Xiaohua
Publication date: 
Thu, 30 Aug 2007

Different approaches are needed to address three different types of competition problems. 

First are problems such as price cartels or pricing agreements, abuse of dominant positions and anti-monopoly concerns in merger and acquisition transactions. These involve violation of antimonopoly law and may be dealt with by legal action.
 
A second type of case is more complex, and involves coordination or interaction between  trade policy and competition policy, rather than outright legal action against the monopoly.
 
A third case is more suitably dealt with under a competition policy framework. For example, a natural monopoly may exist in certain sectors due to economies of scale, as in telecommunications, railway, power transmission, energy and postal services.
 
In a developing country with a transition economy such as China, many anti-monopoly issues are inseparable from other development and reform policies and issues. These issues may be most effectively addressed through a system that allows for coordination in making and implementing competition and anti-monopoly policies.