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5 White Paper on the Business Environment in China
forcement of its anti-monopoly law. Mr. Wang said that of a Comprehensive Way, laying down the framework for a series
335 pricing investigations conducted by the National Devel- of regulations about the development of a market economy,
opment and Reform Commission (NDRC) as of September including power list, setting restrictions on rent-seeking,
2014, only 33 a ected foreign companies. Moreover, nes protecting property rights, opposing monopolization and
imposed on state-owned enterprises were not less than those stimulating innovation. Chinese media reported that all these
levied on foreign companies, Mr. Wang said. He added that, if regulations aim to draw a line between the government and
anything, China will be tougher on Chinese companies than the market, and focus on building a legalized, regulatory
on their foreign competitors. He explained that the intensi- economy. ese regulations will, the report said, “no doubt
play an active role in keeping a fair competitive environment,
ed enforcement of the anti-monopoly law “re ected China’s improving economic e ectiveness. e dividends brought
transition to ongoing supervision of companies and markets, about by these regulations will help greatly China’s economic
rather than simply approving companies’ plans and then fail- transformation and upgrading.” 9
ing to monitor their activities.” 14
In an October 2014 editorial released after the Fourth
Also in September 2014, Chinese regulators echoed Vice Plenum (whose main topic of discussion was implementing
Premier Wang’s comments and denied allegations made by a stronger rule of law), People’s Daily, the de facto broadcaster
foreign business groups that China is using its anti-monopoly of political agendas from the perspective of the Communist
law to unfairly target foreign companies. In a rare joint press Party of China, de ned the “rule of law” as “governance
brie ng, according to the Wall Street Journal, Xu Kunlin, an according to the Constitution. To respect the Constitution
o cial at the National Development Reform Commission and implement it in letter and spirit is to lay the foundation of
accompanied by senior o cials of the Ministry of Commerce the socialist rule of law with Chinese characteristics.”4
and the State Administration for Industry and Commerce,
three of the main entities that have been spearheading anti- at same month, various online Chinese netizens and ac-
monopoly and pricing investigations of the commercial ademics took to the interwebs to express their opinion about
sector in China, said that China treats foreign and domestic the rule of law in China, as aggregated by China Daily:13
companies fairly and reiterated that China does not speci cally
foreign companies for anomalies probes. 17 ( e following are quoted verbatim from China Daily,
October 21, 2014)
e same report speculates that Chinese regulators may be
trying to “curry favor” with the general population by tackling “To prevent the authorities from abusing the law, it is
high consumer prices in China. Critics claim that Chinese necessary to promote transparency in governance and
regulators have used “questionable tactics”, the Wall Street allow ordinary citizens to supervise power. Sunshine
Journal says, such as advising companies under investigation is the best cure for corruption and an indispensable
not to seek legal representation, “to control product pricing in guarantee of the rule of law.”
industries ranging from dairy to auto parts.” Mr. Xu countered fawan.com, Oct 15
by declaring that those companies have been allowed to bring
their own legal counsel to meetings. Ren Airong, a director of “Much needs to be done to establish the rule of law
antimonopoly at the State Administration for Industry and in a society that had long been under the rule of man.
Commerce, added that during the Microsoft investigation, O cials can abuse their power, while citizens dare not
regulators were frequently outnumbered by the software challenge their illegal behavior. Rooting the spirit of
company’s lawyers.17 the rule of law in people’s hearts will be a longer pro-
cess than drafting laws on paper.”
According to the Wall Street Journal, Chinese companies Wang Yukai, professor at the Chinese Academy of Gover-
haven’t been spared the intensi ed scrutiny. Last September, nance, yicai.com, Oct 15
regulators ned three Chinese cement companies a combined
US$18.6 million for price xing.17 “Various levels of people’s congresses sometimes “en-
trust” their legislative power to government agencies.
Emphasizing e Rule of Law
is has resulted in a number of unjust laws that pro-
Continuing the reform platform boldly introduced tect the agencies’ interests at the cost of people’s rights.
during the ird Plenum in 2013 and recognizing that in To promote the rule of law, such distorted practices
order to make these reforms work, it is vital for China to must change rst, and the absurdity of the same pair
have strong regulatory institutions, the Fourth Plenum of of hands holding both legislative power and adminis-
the CCP’s 18th Party Congress in October 2014, passed the trative power must end.”
Decisions on Major Issues about Promoting the Rule of Law in
46
forcement of its anti-monopoly law. Mr. Wang said that of a Comprehensive Way, laying down the framework for a series
335 pricing investigations conducted by the National Devel- of regulations about the development of a market economy,
opment and Reform Commission (NDRC) as of September including power list, setting restrictions on rent-seeking,
2014, only 33 a ected foreign companies. Moreover, nes protecting property rights, opposing monopolization and
imposed on state-owned enterprises were not less than those stimulating innovation. Chinese media reported that all these
levied on foreign companies, Mr. Wang said. He added that, if regulations aim to draw a line between the government and
anything, China will be tougher on Chinese companies than the market, and focus on building a legalized, regulatory
on their foreign competitors. He explained that the intensi- economy. ese regulations will, the report said, “no doubt
play an active role in keeping a fair competitive environment,
ed enforcement of the anti-monopoly law “re ected China’s improving economic e ectiveness. e dividends brought
transition to ongoing supervision of companies and markets, about by these regulations will help greatly China’s economic
rather than simply approving companies’ plans and then fail- transformation and upgrading.” 9
ing to monitor their activities.” 14
In an October 2014 editorial released after the Fourth
Also in September 2014, Chinese regulators echoed Vice Plenum (whose main topic of discussion was implementing
Premier Wang’s comments and denied allegations made by a stronger rule of law), People’s Daily, the de facto broadcaster
foreign business groups that China is using its anti-monopoly of political agendas from the perspective of the Communist
law to unfairly target foreign companies. In a rare joint press Party of China, de ned the “rule of law” as “governance
brie ng, according to the Wall Street Journal, Xu Kunlin, an according to the Constitution. To respect the Constitution
o cial at the National Development Reform Commission and implement it in letter and spirit is to lay the foundation of
accompanied by senior o cials of the Ministry of Commerce the socialist rule of law with Chinese characteristics.”4
and the State Administration for Industry and Commerce,
three of the main entities that have been spearheading anti- at same month, various online Chinese netizens and ac-
monopoly and pricing investigations of the commercial ademics took to the interwebs to express their opinion about
sector in China, said that China treats foreign and domestic the rule of law in China, as aggregated by China Daily:13
companies fairly and reiterated that China does not speci cally
foreign companies for anomalies probes. 17 ( e following are quoted verbatim from China Daily,
October 21, 2014)
e same report speculates that Chinese regulators may be
trying to “curry favor” with the general population by tackling “To prevent the authorities from abusing the law, it is
high consumer prices in China. Critics claim that Chinese necessary to promote transparency in governance and
regulators have used “questionable tactics”, the Wall Street allow ordinary citizens to supervise power. Sunshine
Journal says, such as advising companies under investigation is the best cure for corruption and an indispensable
not to seek legal representation, “to control product pricing in guarantee of the rule of law.”
industries ranging from dairy to auto parts.” Mr. Xu countered fawan.com, Oct 15
by declaring that those companies have been allowed to bring
their own legal counsel to meetings. Ren Airong, a director of “Much needs to be done to establish the rule of law
antimonopoly at the State Administration for Industry and in a society that had long been under the rule of man.
Commerce, added that during the Microsoft investigation, O cials can abuse their power, while citizens dare not
regulators were frequently outnumbered by the software challenge their illegal behavior. Rooting the spirit of
company’s lawyers.17 the rule of law in people’s hearts will be a longer pro-
cess than drafting laws on paper.”
According to the Wall Street Journal, Chinese companies Wang Yukai, professor at the Chinese Academy of Gover-
haven’t been spared the intensi ed scrutiny. Last September, nance, yicai.com, Oct 15
regulators ned three Chinese cement companies a combined
US$18.6 million for price xing.17 “Various levels of people’s congresses sometimes “en-
trust” their legislative power to government agencies.
Emphasizing e Rule of Law
is has resulted in a number of unjust laws that pro-
Continuing the reform platform boldly introduced tect the agencies’ interests at the cost of people’s rights.
during the ird Plenum in 2013 and recognizing that in To promote the rule of law, such distorted practices
order to make these reforms work, it is vital for China to must change rst, and the absurdity of the same pair
have strong regulatory institutions, the Fourth Plenum of of hands holding both legislative power and adminis-
the CCP’s 18th Party Congress in October 2014, passed the trative power must end.”
Decisions on Major Issues about Promoting the Rule of Law in
46
