As per the announcement of 18th November 2021, the State Administration for Market Regulation (SAMR) established a dedicated Anti-Monopoly Bureau (AMB) with three new departments: the Department of Competition Policy Coordination as well as two Law Enforcement units.
As the AMB was long-time notoriously understaffed, this organizational move is not only elevating the importance of anti-monopoly work, in line with the announcement of the 14th Five-Year-Plan, but also the body’s personnel is now being significantly sized up.
At the opening ceremony, State Councilor Wang Yong, Chair of the Anti-Monopoly Commission and thus China’s antimonopoly czar, said antitrust regulations will focus on the platform economy, technology innovation, data security and people’s livelihood. Accordingly, both Law Enforcement units have so far most prominently listed digital economy as their focus.
But also other economic sectors won’t escape the attention of the AMB: a new regulation issued on the same day as the AMB’s launch focuses on the pharmaceutical industry, specifying guidance for implementing anti-monopoly work in the market for active pharmaceutical ingredients (API).
So far, it seems that no policy explicitly indicates that the Chinese government intends to use anti-monopoly measures as a tool against foreign companies that enjoy monopolistic market strength in technology areas with stated Chinese self-sufficiency ambitions.
However, there is some contrary evidence: first, a recently published list from the semi-official Science and Technology Daily media, affiliated to the MOST, identified so-called “bottleneck technologies”, meaning technologies where China’s needs to urgently increase its self-sufficiency, for which supply is dominated by foreign firms, flagging national security risks. Second, the Development Research Center of the State Council claimed in 2020 that many areas of China’s medical equipment sector (e.g., 90% of China’s pacemakers) were “monopolized” by foreign companies and suggests measures such as completing financial and logistics services to build China’s own strong and secured supply chain.
Long a subject of concern among reformist elites in China, this topic is finally on top of the policy agenda. As part of further developing China’s socialist market economy under the overarching goal of “common prosperity”, the stated goal is to increase efficiency and fairness of the market to better protect interests of consumers and SMEs and serious follow-through can be expected.
For foreign companies, dominant positions – even in niches – for supplying sophisticated machinery, equipment and components in the industrial, health or energy sectors are likely to face particular scrutiny where conflicting self-sufficiency goals and monopolistic market strength coincide.
State Council DRC: 中国须加速构建强大安全的制造业供应链体系