Direct government intervention in market activities will harm
fair competition, says a signed article in Shanghai Securities
News. An excerpt follows:
The Ministry of Commerce (MOC) headed an activity to select
"famous Chinese wines" last September.
Now Henan Baofeng Wine Co has filed a suit with the Beijing
Second Intermediate People's Court accusing the ministry of
unlawful administrative behavior.
The company thought that its Baofeng Wine had already been
graded as a "famous Chinese wine" by the appropriate departments so
it did not register for the ministry's new wine grading activity.
But when the MOC publicized the best-selling famous wines list last
month, many traditional "famous Chinese wines", including Baofeng,
were not included. The company believes this activity has
restricted fair competition.
Selecting famous brands is a market activity and should be
conducted by the market or intermediate organizations, not the
government.
There are many problems in government-led selection of famous
brands. First, the competition is limited to products whose
manufacturers pay to compete. Second, the government is both the
rule maker and an interested party in such activities.
These activities held by government departments place a heavy
burden on enterprises. They have to spend time and money to
participate.
In fact, a government department's involvement in market
activities through establishing an organization violates the
Administrative Permission Law.
(China Daily May 21, 2007)