An official with China's top legislature says the government
will maintain its policy of encouraging foreign investment
unchanged after the passing of the country's first anti-monopoly
law.
The official with the Commission for Legislative Affairs of the
Standing Committee of the National People's Congress said the necessary
security checks on foreign investment in domestic enterprises would
pose no obstacles to the utilization of foreign capital.
The legislature passed the anti-monopoly law on Aug. 30 and it
will come into effect on Aug. 1, 2008.
The law requires checks on mergers of foreign and Chinese
enterprises to ascertain whether they affect national security.
"China has already established basic checks on foreign
investment through regulations," the official told Xinhua.
A regulation issued by the State Council authorized government
departments to initiate checks if the foreign firms "jeopardize
national security or public interests" or "employ Chinese developed
technology".
Another rule jointly published by six ministries and departments
requires foreign companies to submit to checks if they take control
of a joint venture in one of China's key industries.
"Checks on mergers of foreign and domestic firms are practiced
by many countries," the official said, adding the law was following
international practice.
"The anti-monopoly law will intensify regulation of the market
and help to provide a better market environment for both domestic
and foreign investors," he said.
The official said the law would prevent SOEs in monopolistic
industries such as petroleum, telecommunications, mail services and
tobacco from abusing their market dominance to lower services and
disregarding the public interests.
China joins more than 80 countries in adopting an anti-monopoly
law.Drafting of the law began in 1994.
Experts said China's socialist market economy had matured in the
last decade, and the current market circumstances made the
introduction of an anti-monopoly law imperative.
(Xinhua News Agency October 4, 2007)