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Foreign Investors Express Concerns Over New Chinese Antitrust Agency

by Mary Swire, for LawAndTax-News.com, Hong Kong

14 January 2004

The creation of a new antitrust agency in China after more than 10 years of discussion has raised concerns amongst existing and potential foreign investors, according to reports in the Chinese media.

Anti-monopoly laws are required by the WTO; and according to the China Consumers Association, most complaints lodged in 2000 were against the monopolized industries.

The new body will create laws governing monopolies on the Chinese mainland, and will report to the State Council. However, it is the plans to allow the agency to approve domestic mergers and foreign acquisitions of local firms which have given overseas investors pause, as they fear that the system could be abused by domestic firms.

"Foreign investors are concerned about this and are wondering how such rules may be used," Lucille Barale, Hong Kong partner with law firm, Freshfield Bruckhaus Derringer explained to the South China Morning Post.

Peter Neumann, lawyer at the Shanghai office of Faegre and Benson echoed these concerns, suggesting to the business daily that:

"For companies that want to merge or acquire Chinese companies, you could have competitors getting nervous and putting pressure on the government to hold antitrust hearings."

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