Chapter 13: The legal regulation of administrative restrictions on competition
In Western industrialized nations, the traditional role of anti-monopoly law is to curtail market power and prevent monopolies. Since competition could lead to monopolies, and full and unrestricted ‘freedom to contract’ could also lead to unreasonable socio-economic consequences, the state must play the role of referee over competition, regulating competition and protecting the market system, balancing market participants’ individual interests and the public interest. However, at China’s current stage of transition from a planned economy to a market economy system, under immature market conditions, and especially due to the lingering legacy of the planned economy, there are still all kinds of restrictions on competition. These stem mostly not from economic entities, but from administrative authorities left over from the old system. As a result, China’s Anti-Monopoly Laws should not only oppose economic monopolies, but also oppose administrative restrictions on competition. At this stage, regulating administrative restrictions on competition should in fact become the most important content of the law. ‘Administrative restrictions on competition’ refer to the abuse of authority by the government and its departments in order to restrict competition. These actions are viewed as ‘abuses of power’ because they do not fall under the government’s responsibility to maintain the socio-economic order or manage regular economic activities, and are also not part of the government’s macroeconomic controls of the national economy (such as fiscal, social, or production policies).
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