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By Susan Ning, Shan Lining and Angie Ng

The radiation leaks in Japan’s Fukushima Daiichi nuclear plant (caused by the earthquake-tsunami in Japan on 11 March) has made consumers in China paranoid about the salt they will consume in the near future.  Once news of the leak in the nuclear plant broke, there was a mad "scramble" to purchase table salt – as Chinese consumers were concerned that in the near future, the sea water around China would be contaminated as a result of the radiation leakage.  According to press reports, around the same time, some table salt retailers proceeded to raise the retail prices of iodized table salt.

The Chinese Government controls prices in relation to table salt.  Specifically, the ex-works and wholesale prices of table salt are set by the National Development and Reform Commission (NDRC, the central price authority); in addition provincial price authorities also control to some extent, the retail prices of salt.  In some provinces, provincial price authorities set maximum retail prices – this means that table salt retailers are not to charge above a price set by these authorities.Continue Reading Salt Price Hikes Curbed by the Price Law

By Susan Ning, Huang Jing and Shan Lining

On March 4 2011, just one day before the implementation of the national security review mechanism1, the Ministry of Commerce (MOFCOM) released the MOFCOM Interim Rules for Implementation (Interim Rules). These Interim Rules came into effect on 5 March and are set to expire on 31 August 2011.

The Interim Rules provide more details in relation to how the national security review process is initiated, documents to be submitted and more details the initiation of a national security review, the required documents, and the review decisions.
 Continue Reading MOFCOM issues national security review interim rules

By Susan Ning, Yin Ranran, Huang Jing

There have been concerns about Chinese government’s foreign investment policy ever since the State Council announced the formal establishment of the national security review ("NSR") regime in China.  At a press conference of the Fourth Session of the 11th National People’s Congress held on March 7, 2011, China’s Minister of Commerce Chen Deming reiterated that China’s "opening-up" policy will remain unchanged.  According to Chen, whereas China is in the process of further opening up to the world, introducing the NSR regime ensures that national security concerns will be addressed in a transparent manner and it is in line with international practice. 

The NSR regime is not particular to China.  The United States first instituted the NSR process in the 1980s.  Other jurisdictions, such as Australia, Germany, Canada, also have similar processes (see our article entitled More on China’s national security review regime – the American regime vs the Chinese regime).  Through our research, we find that during the past few years, the following contemplated outbound investments by Chinese companies underwent the NSR process:Continue Reading List of Outbound Investments by Chinese Companies Scrutinized for National Security Concerns

By Susan Ning, Liu Jia and Angie Ng

In March every year, lawmakers and political advisers from the National People’s Congress (NPC) (Chinas equivalent of Parliament) and the Chinese People’s Political Consultative Committee (CPPCC) (China’s top advisory body) conduct sessions in Beijing to take stock of social, legal and economic issues in China for the preceding year; and discuss objectives (in relation to the same issues) for the year going forward1.    These sessions are often referred to as the "two sessions".

Two statements which have arisen during these two sessions; are of particular interest (from an antitrust law perspective):
 Continue Reading The annual “two sessions” and antitrust law noises

By Susan Ning, Angie Ng and Shan Lining

On 3 February 2011, China’s State Council released a notice which governs a national security review process for foreign acquisitions of domestic companies1.   This national security review process will be implemented on 5 March 2011.

Since the release of the notice, there has been a flurry of articles and commentaries in both the legal and business media circuit.  Foreign businesses who wish to invest in China are concerned that this is potentially another tedious clearance process (on top of the corporate, regulatory and antitrust clearance processes) to pass before they are free to close their proposed transactions.Continue Reading More on China’s national security review regime – the American regime vs the Chinese regime

By Susan Ning, Shan Lining and Angie Ng

On 5 March 2011, China will implement its first National Security Review (NSR) regime.  This NSR regime will govern foreign acquisitions of domestic companies.  The precise boundaries of this NSR regime has been set out in a notice (specifically, a Notice on Establishing National Security Review by Foreign Investors issued by the State Council1. ). 

We know, from the notice mentioned above that, broadly, a foreign-local transaction may only be caught if: (a) the foreign company acquires de facto control over a local company; and (b) the local company is involved in selling goods or services in relation to either national defense security or national economic security.  [Note that if a foreign company acquires a local company involved in selling goods or services in relation to national defense security, the threshold set out in (a) (i.e. de facto control) does not need to be established.  In other words, the transaction will come under the purview of the notice, despite there being no de facto control.]

This article outlines the above mentioned two thresholds (i.e. de facto control) and what is meant by national defense and national economic security in more detail.
 Continue Reading Will my transactions be subject to the new National Security Review regime?

By: Susan Ning, Liu Jia and Yin Ranran

Recently, the Jiangsu Administration for Industry & Commerce ("Jiangsu AIC") issued sanctions against the Concrete Committee of the Construction Materials and Construction Machinery Industry Association of Lianyungang City ("Association") and 16 concrete manufacturers for breach of the Anti-Monopoly Law, by way of having entered into a monopoly agreement.  

This is the first publicly released enforcement decision by the SAIC (which delegated power onto the AIC) in respect of the Anti-Monopoly Law (AML), since the enactment of the AML in August 20081. 

The State Administration for Industry & Commerce ("SAIC") possesses the jurisdiction to govern and enforce non-price prohibitions in respect of the AML. And, according to the Article 10 of the AML and the Article 2 of the Procedural Rules by Administration of Industry and Commerce regarding Investigation and Handling of Cases relating to Monopoly Agreement and Abuse of Dominant Market Position, where necessary, SAIC may delegate to relevant AIC of a province, an autonomous region, or a municipality ("Provincial AIC") the authority of anti-monopoly law enforcement with regard to monopoly agreement and abuse of dominant market position.

 Continue Reading First Public Enforcement Decision by SAIC against concrete manufacturers

By Susan Ning, Liu Jia and Angie Ng

We understand from media reports that on 18 February 2011, Hudong1  (a Chinese internet search engine) made an Anti-Monopoly Law (AML) complaint to the State Administration for Industry and Commerce (SAIC) against Baidu2  (arguably the most often or commonly used internet search engine in China; often referred to as China’s equivalent of "Google"). Continue Reading Wiki-Hudong against Wiki-Baidu – an abuse of dominance?

By Susan Ning, Shan Lining, Yin Ranran and Angie Ng

On February 3, 2011, the State Council released the Notice on Establishing National Security Review Mechanism for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors ("Notice").   According to the Notice, China will implement a national security review process in relation to foreign funded mergers and acquisitions ("M&A") of domestic enterprises 30 days after the issuance of the Notice. A ministerial joint committee ("Joint Committee") led by the National Development and Reform Commission ("NDRC") and the Ministry of Commerce ("MOFCOM") will be set up to administer and enforce the national security review process. Continue Reading National Security Review Mechanism Formally Established in China