Competition Policy: One Theory, Three Systems

Abstract

There are few subjects more important to governments than economic growth and development; the key question is how best to achieve them. The governments of China, Hong Kong and Taiwan are no different to other jurisdictions is this respect. All three entities now subscribe, to a greater or lesser extent, to market-orientated solutions to economic problems. But few governments are prepared to tolerate a complete laissez faire economy. All governments seek to regulate their economies to some extent or other. Socialist economics requires complete state domination of all the factors of production, whereas the majority of countries that subscribe to a capitalist model seek to ensure that the mechanism that delivers the optimal operation of markets, namely competition between rival businesses, is fostered and maintained. Competition policy comprises a political commitment to markets, public education and advocacy campaigns, and the allocation of sufficient resources (both human and financial) to endow an enforcement body and administrative instruments to promote competition. These are the elements needed to achieve a competition culture. However, a competition policy cannot be effective without a legislative instrument that articulates the policy in normative terms, gives power to an enforcement body to investigate complaints, and an adjudicative mechanism to resolve disputed decisions and provide suitable penalties for those who break the law. The legislative tool to achieve the fulfilment of this policy choice is competition or antitrust law 1. This article seeks to examine the present position of competition policy and law in mainland China, Hong Kong and Taiwan. It is not possible to microscopically examine this very large topic here 2. However, a general survey, with illustrations of the most important facets of each system, will be attempted. The differing approaches to competition regulation resulting from the political and economic systems found in each jurisdiction will be analysed.