SHI TING

Beijing has finally issued a draft of its anti-monopoly legislation, but it does not provide for an independent watchdog to oversee its implementation.

The absence of such a watchdog reporting to the State Council - a proposal floated during the drafting process - has prompted some legal experts to question the effectiveness of the prospective legislation.

State media reports said the draft version of the law was submitted to the State Council's Legislative Affairs Office and distributed to related departments on October 27.

Shang Ming , head of the Ministry of Commerce's new anti-trust office, said the legislation would increase competition and improve the mainland's market environment.

The draft law contains articles regulating monopoly agreements, abuse of dominant market status, large-scale consolidation and administrative monopolies.

There have been concerns about the lack of an anti-monopoly law on the mainland, with multinationals posing an increasing threat to local operators, particularly with the opening of markets under the country's World Trade Organisation commitments in the next two years.

A researcher with the Institute of Legal Studies at the Chinese Academy of Social Sciences, who is close to the drafting work, said it was unlikely there would be a high-level national agency within the current administrative framework.

"The absence of such an agency will make the law less powerful and less effective," he said, stressing the need for a body to deal with "administrative monopolies" created by government policies.

"Without sufficient power, there would be no way to beat some practices by government organs that obstruct competition."

It also took an independent agency to deal with market-dominating enterprises, which often possessed strong lobbying power, he said.

The biggest monopoly in the country's economic activities was government at all levels, he said, adding: "The thrust of such a law should be about how to check and curb administrative monopolies."

Official media said the draft devoted a whole chapter to dealing with government-related monopolistic activities.

It prohibits government departments from coercing people into buying or selling the commodities of designated operators and also blocks attempts at local protectionism, such as creating regional trade zones by restricting the exchange of commodities across provincial borders.

It is understood that the central government has yet to decide which agency should oversee the implementation of the law.

The Ministry of Commerce has taken on responsibility for preparing the draft, but the State Administration of Industry and Commerce - which oversees the existing law against unfair competition, that contains some anti-monopoly stipulations - also wields power in some areas.

The drafting of the anti-trust law started in 1994 but has been subject to numerous revisions because of a range of controversies.