Chinese Antitrust Exceptionalism - How the rise of China challenges global regulation, Angela HUYUE ZHANG

Angela Huyue Zhang

There are two parts to this book. The first details the system of enforcement of competition law in the People’s Republic of China (PRC), and the antitrust landscape facing a foreign company wishing to do business in the PRC. The second is its mirror image, pointing out the difficulties that Chinese firms face when expanding abroad, in particular to the US and the EU. The interdependencies of a globalised world explain how decisions in one country lead to countermeasures in another. Applying a game theory approach, Zhang is able to find hope in this setup: retaliation on a small scale can show to a country the consequences of its brinkmanship, without tipping into a full-scale (antitrust) war.

The first part of the book provides an insightful and thought-provoking description of a system that has come a long way in a short time, but that can seem baffling to a Western observer. Zhang draws from her own interviews with judges and enforcers to shed light on cases that are sometimes difficult to find in English translations. She brings to the subject–matter her own considerable knowledge of economics, game theory, industrial organisation, political science and sociology.

A starting point to understand antitrust in the PRC is the bureaucracy which enforces the Anti-Monopoly Law. Antitrust enforcement in the PRC is (and was) carried out by specific departments of wider state organisations (Ministries, Commissions and Administrations). When we refer to ‘SAMR’ as the agency created in 2018, for example, we mean the Antimonopoly Bureau within the State Administration for Market Regulation (SAMR).

The 2011 antitrust investigation of China Telecoms and China Unicom, the two State-Owned Enterprises (SOEs) provides an illustration of the stringent bureaucratic constraints that apply. SOEs are themselves part of the bureaucracy, with a rank determined by their governance. The rank of the leaders of China Unicom and China Telecom was equal to that of the leader of the investigating agency (the NDRC) and outstripped that of the Director General of the Antitrust Bureau within the NDRC. Central SOEs are also overseen by the powerful State-owned Assets Supervision and Administration Commission (SASAC) whose goal is to maximise the value of the assets it oversees; antitrust penalties impact share performance and asset value. Ultimately the investigation resulted in commitments on the part of the SOEs to reduce fees but not a fine; the investigation was effectively suspended.

Zhang explains other facets of the bureaucratic nature of enforcement in the PRC. Because power is fragmented between agencies (eg, in this case, SASAC and NDRC), consensus and compromise are necessary. Because of administrative decentralisation, the local offices of the agency report both to the local government (which controls their budget), and to the central agency. The local government can shield local SOEs, unless the central agency intervenes.

It is therefore not surprising that antitrust enforcement in the PRC is at its strongest against privately owned firms, against Alibaba and the Big Tech sector, rather than against China Telecom and China Unicom. Moreover, other rules, such as anti-corruption, or food safety are enforced by interconnected agencies: a conflict with any one of them can aggravate the position of a company with the others. The companies investigated generally ‘confess’, agree to what is required and pay the fine. And because trade associations and chambers of commerce are often ‘converted from government ministries’ (in a system historically based on a planned economy), they can play a key role in facilitating agreements between firms, and export cartels.

In the second part of the book, Zhang explores the interplay between competition and trade law for Chinese companies exporting to the US; and the merger control case-law of the EU.

The US Vitamin C cartel case becomes a perfect background scenario to explain how oversupply meant that Chinese manufacturers were happy to lower the price in order to export, but lowering the price exposed them to the risk of sanctions under trade law. It appears from the court documents that the PRC government stepped in to coordinate the export of vitamin C and set an increased price to avoid antidumping duties. The US importers sued for breach of antitrust. The prices were coordinated by a Chamber of Commerce, with a vague legal status: publicly it promoted itself as an ‘independent, non-government organisation’, but the PRC Ministry of Commerce (MOFCOM) described it as an instrument through which the Ministry itself regulated exports. Zhang explores the case in detail—no spoilers in this review.

The inherent difficulty of identifying the extent of state control over PRC companies also explains the difficulties experienced in the assessment of EU mergers involving Chinese SOEs. Zhang points out a difference in the way that European SOEs are treated as compared to Chinese (and Russian) SOEs. Given that there is no clear distinction between ownership and control for Chinese firms and that SOEs’ investments are often opaque, however, the EU could not but apply the Merger Regulation (EUMR), with its focus on the boundaries of ‘undertakings’. This reviewer found themselves wanting to learn more, but the format of the book does not allow for a more in-depth consideration of some of the concepts. Recital 22 of the EUMR, for example, about the treatment of SOEs, is not a binding legal clause, but an aid to interpretation (expanded upon in the Jurisdictional Notice). A blanked application of a ‘China Inc.’ approach across merger control and antitrust would complicate a finding, eg that Chinese companies have colluded in a cartel, but the two are different areas of law. The contingencies that must be considered in a forward-looking review of mergers may not be relevant in, eg, a cartel investigation.

Overall, this is a must read for anybody with an interest in antitrust. In the final analysis, the answer to any perceived risks of Chinese influence over the global economy cannot be to cut off Chinese firms from Western markets. This would risk turning China into ‘a more isolated, self-reliant, and inward-looking country’, ‘drowning the voices of progressive Chinese reformists advocating for a freer and more equitable China’.


  • The Chinese University of Hong Kong


Emanuela Lecchi, Chinese Antitrust Exceptionalism - How the rise of China challenges global regulation, Angela HUYUE ZHANG, May 2021, Concurrences N° 2-2021, Art. N° 101305,

Publisher Oxford University Press

Date 11 March 2021

Number of pages 272

Visites 319

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