Introduction

Competition law in China is a developing subject. As part of the government's policy of restructuring the planned economy of the past into a ‘socialist market’ economy, a mechanism to ensure an efficient allocation of economic goods is a key policy goal. At present there is a patchwork of miscellaneous laws and regulations that seek to prevent the most damaging anti-competitive activities found in the transitional Chinese economy but a strong theoretical foundation to support the competitive mechanism is currently lacking, as is a comprehensive legal code to set the market rules. However, since at least 1994 the central government has been considering its options. State organs have been studying competition regimes around the world, seeking to gain insight into how different governments police free-market systems. The help of international organisations, particularly the OECD, has been sought, to enhance capacity building. Detailed consideration of the work of the Drafting Committee and the influence of these international consultations will be given in the next chapter.

The purpose of this chapter is to introduce the background historical, political and economic developments in China since the foundation of the People's Republic in 1949, to consider the political infrastructure within which competition law and policy are developed and to explain some of the idiosyncrasies of the Chinese system that have a direct bearing on competition policy formation and implementation including opacity and local protectionism.