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China plans new competition, food watchdog in government revamp

Reuters  |  BEIJING 

By and Michael Martina

BEIJING (Reuters) - will form a powerful new competition and regulator in a bid to ramp up oversight of mergers and acquisitions and price-fixing as the world's second-largest economy seeks to make policymaking more efficient.

In much-anticipated plans to create seven new ministries and a raft of government agencies announced on Tuesday, one of the most significant changes is the creation of a national markets supervision management bureau.

The new body will decide on antimonopoly and pricing issues, replacing the competition oversight roles of the three national antitrust regulators: the (NDRC), the (SAIC).

The bureau "will undertake unified antitrust enforcement and standardise and safeguard market order", among other duties, China's State Council, or cabinet, said in a proposal submitted to the annual parliament session.

The proposal is certain to be approved before the session ends on March 20.

Chinese legal experts had said the division of antitrust oversight led to inter-agency competition and one-upmanship as each vied to implement the country's 2008 Anti-Monopoly Law.

Reform of the regulators had long been discussed among antitrust officials, but the agencies proved resistant to the narrowing of their powers.

Adrian Emch, a partner and antitrust expert at in Beijing, said the overhaul would only have been possible in the context of a broader ministry shake-up, and that unifying the functions within a single powerful new agency could raise the profile of China's competition policy.

"As in any organisation, there will be internal rivalries," he said. "But this should avoid the turf wars to a large extent."

For years, foreign business lobbies have expressed consternation over China's antitrust enforcement, saying it applied excessively broad national security considerations, and that regulators strong-armed companies into compliance or to give up intellectual property.

U.S. industry groups have warned that antitrust could be used as a lever to hold up mergers or hit U.S. companies with investigations in escalating trade frictions.


The restructuring comes as vowed to make the economy more responsive to market forces and shift to consumer-focused investment from a state-led model.

The new agency will also take control of most functions now performed by the General Administration of Quality Supervision, (AQSIQ) as well the Food and Drug Administration.

The reform abolishes those two agencies, as well as the AQSIQ's role as for imports and exports will transfer to customs, the cabinet said in its proposal.

Experts say the changes are another sign the government wants to better coordinate regulation and enforcement of food safety, a hot-button issue after scandals in recent years involving contaminated and

But even with the new structure, regulatory power may still be split, with the newly-expanded keeping charge of ensuring the quality of farm produce, said Erlend Ek, a Beijing-based Policy.

"is clearly on the way to creating a single (food safety) agency, but it's not clear if they've done it now," Ek said.

(Reporting by Mason, Michael and Dominique Patton; Editing by and Clarence Fernandez)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, March 13 2018. 17:52 IST