original post from: bingfeng cafe
read the article here: Fear of foreign juggernauts speeds up China's anti-monopoly legislation
if you read carefully, you will find that there is a short paragraphy on "administrative monopolies" in this article. in another article (in chinese) from beijing daily, the author argues that
"the main monopolistic power (in china) is the administrative monopolies backed by government, not the economic monopolies brought by market competition".
this perhaps explains why china hesitates to develop an anti-monopoly law. the perception is that a certain level of monopolies enhances the industry integration and therefore elevates the competitiveness of domestic firms when foreign firms enter the china market.
to chinese government (and enterprises), this policy is a double-edged sword, it helps chinese firms to stand their ground in some industries but also gives the same opportunities to foreign firms to dominate some other industries.
it seems recently many chinese economists pay attention to the negative impacts of monopolies by foreign firms, in one of today's hexun articles (in chinese), the author compares the GDP and GNI growth rates and concludes that chinese didn't enjoy the economic growth in china as those foreign firms did. and i am not surprised to find that those so-called "economic nationalists" advance the anti-monopoly law against foreign firms very hard. all these are the forces behind the accelerated legislation process.
the interesting thing is - a sword is always double-edged. if the anti-monopoly law is designed to against multinationals, it also puts a threat to domestic firms that were protected by administrative powers. so, let's see how it works out.
from this case i have a further thoughts on how china manages the economic development. i read an article that compares the governments' role in china and india's economic developments. although the article didn't give me an convincing inference, i think it might be appropriate to argue that a strong government could impose both good and bad influences on the economy, being unable to see the bad influences doesn't mean they don't exist. and to china (and shanghai!), it's time to reflect on how government can better enhance the economic development without bringing all the negative sides.
to be continued.