It is encouraging news for the Chinese people that the government is determined to break monopolies that exist in various sectors. Yet, there are many bottlenecks that must be eliminated to facilitate the success of the ambitious and arduous move, according to Chinese economic experts.
To break the monopolies is one of the most important tasks of China's 10th Five-Year Plan (2001-05). Telecommunications, railways, aviation and electric power will be the focal point of the first phase of reform, according to Wang Qishan, director of the State Economic Restructuring Office, who spoke at the recent China Development Forum.
Anti-monopoly will help to create a fairer and more rational market competition mechanism, thus boosting technical upgrading and creating a sound environment for the mushrooming of small and medium-sized firms. Over the past few years, the Chinese government has made great efforts in ushering in fair competition and breaking up monopolies. Yet, many difficulties remain.
Monopoly is often in relation to the interests of various departments including government administrations at all levels. Local protectionism, a typical example, imposes various restrictions on the trade in goods and services from elsewhere. It tests a businessman’s patience to do business in China, who must endure and go through numerous local standards, regulations, and customs. Some of these are just nonsense. They may vary from province to province, from city to city, from county to county and from village to village.
Success in tackling the problems lies in separating the government's management role from enterprise operation and giving full play to market forces.
Economists say China's trade barriers could bury the achievements of its entry into the World Trade Organization. United standards and norms should be formed and followed by every sector in the country. Only this way can foreign investors feel confident about coming to China for business, and healthy market competition can exist.
With WTO entry close at hand, how to eliminate these barriers was hotly debated at the National People's Congress' annual session in March.
The move still needs more workable laws and regulations to support it. The Anti-Unfair Competition Law that has been in place since October 1993 cannot cover many monopolies existing in the current market economy. Economic laws and regulations established during the planned economy era feature an unclear relationship between enterprises and government administration and actually protect the interests of monopoly.
Some people call China’s move to eliminate monopolies a breathtaking jump, since it is difficult to persuade many longstanding vested interests give up their benefits. These forces may rise in resistance against it by various means. So, the anti-monopoly effort calls for joint action to promote the campaign.