EI’s Founder and Special Consultant Bruce Owen and Senior Economist Su Sun (and a third co-author) presented a paper titled “Antitrust in China: The Problem of Incentive Compatibility” at the Conference on China’s Policy Reforms: Progress and Challenges, hosted by the Stanford Center for International Development, October 14-16, 2004.
This paper reviews China’s recent efforts to enact an antitrust law. It focuses on three issues: (1) What is the substance of the proposed law, and how does it differ from existing antitrust law in other countries, (2) How will the law be implemented or enforced, and how will those who must implement this law interpret their mandate, and (3) What will be the likely effects of this law given China’s unique history and cultural heritage. The paper emphasizes China’s economic, legal and regulatory contexts in which an antitrust law may be enforced. The central focus is the problem of establishing a substantive and procedural legal framework that is incentive-compatible with economic efficiency and growth.