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By Susan Ning, Liu Jia and Hazel Yin

On 22 February, 2013, Guizhou Provincial Pricing Administration (“Guizhou Pricing Administration”) released the decision to impose a penalty of RMB 247 million (about USD 39.8 million) on Kweichow Moutai, the most famous Chinese state-owned producer of premium liquor, for administering resale price maintenance (“RPM”).  On the same day, Sichuan Provincial Development and Reform Commission (“Sichuan PDRC”) released its decision to penalize Wuliangye, another state-owned premium liquor producer, in an amount of RMB 202 million (about USD 32.6 million) for RPM as well.  Both agencies are local counterparts of the National Development and Reform Commission (“NDRC”), which is charged with the responsibility to enforce against price-related monopoly agreements, including RPM under the Anti-Monopoly Law (“AML”).

The news has made a huge stir, because this is the first time the Chinese AML enforcement agencies penalized RPM under the AML.  Besides, the two fines add up to RMB 449 million (about USD 72.4 million) in total, the largest penalty in China’s AML enforcement history so far.
Continue Reading Chinese Antitrust Authorities Imposed Large Fines on Kweichow Moutai and Wuliangye for Resale Price Maintenance

By Denis Brock   Stuart Valentine  Jansy Man  King and Wood Mallesons’ Hong Kong office

The recent decision of Re AXA (Hong Kong) Life Insurance Co Ltd[i] highlights the Court’s role in the transfer of a Hong Kong long term insurance business. In this instance, the Court approved the intra-group transfer of AXA (Hong Kong) Life Insurance Company Limited’s (“AXA HK”) long term business to AXA China Region Insurance Company (Bermuda) Limited (“AXA CRIB”).
Continue Reading Court as gatekeeper – the transfer of long term insurance business in Hong Kong

By Xiong Jin, Feng Caihong, Liu Qing and Wei Kao  King and Wood Mallesons’ Mergers & Acquisitions Group

On November 19, 2012, the State Administration of Foreign Exchange (“SAFE”) promulgated the Circular Regarding Further Improvement and Adjustment of Policies on Foreign Exchange Administration of Direct Investment (Hui Fa [2002] No. 59, the “Circular”) which aims to dramatically simplify foreign exchange administration procedures concerning inbound and outbound direct investment. The Circular is a response to a directive to reduce administrative approvals in the Decision of the State Council on the Sixth Abolishment and Adjustment of Administrative Examination and Approval Projects (Guo Fa [2012] No. 52) promulgated by the State Council on 23 September 2012, and it also reflects a trend of relaxing foreign exchange supervision given China’s accumulation of major foreign exchange reserves. The Circular will be become effective on December 17, 2012 and is expected to have a significant impact on foreign direct investment and outbound investment by domestic enterprises.
Continue Reading SAFE Issues New Rules to Further Relax the Foreign Exchange Controls over Direct Investment

By Denning Jin King and Wood Mallesons’ IP Litigation Group

Introduction

Fair and equitable treatment (FET) originated from the Havana Charter of 1948 and the adoption of the FET standard accelerated in the late 1960s and in the 1970s when it was widely incorporated in bilateral investment treaties. By the end of 2009, 2,750 bilateral investment treaties (BITs) have been concluded,[i] and the vast majority have incorporated FET together with other standards such as full protection and security, using very similar language, as a safeguard against violations by the host state.[ii] However, it was not until the early twenty-first century that FET was applied in investor-state arbitral jurisprudence,[iii] where claimants lodged claims and tribunals found host state liability based on FET.
Continue Reading Fair and Equitable Treatment – Should the Standard be Differentiated According to Level of Development, Government Capacity and Resources of Host Countries?

By Susan Ning, Hazel Yin and Yunlong Zhang

The year 2012 marks the fifth year of the enactment and implementation of China’s Anti-Monopoly Law (“AML”).  Over the past year, we have witnessed substantial progress of the merger control regime and antitrust administrative investigations, in particular in the area of cartel investigations.  With the promulgation of judicial interpretation of the Supreme People’s Court, antitrust civil litigations are also picking up.  As the Year of Dragon is coming to an end, we present this article with an overview of how the AML has been implemented in the past year, together with our observations.  

I. Merger Control

The Ministry of Commerce (“MOFCOM”), the authority in charge of merger control review, maintained a similar caseload in 2012 compared to 2011 and has been gradually establishing its international reputation as one of the most important antitrust authorities.  
Continue Reading The Anti-Monopoly Law of China: What We Have Seen in 2012?

By Antitrust & Competition Group

On 23 December 2013, the All China Lawyers Association (ACLA) announced the establishment of the Antitrust Committee, showing that antitrust law has been recognized by the legal community in China as an important segment of the Chinese legal system.

The ACLA is the association of all admitted PRC lawyers.  It was established in 1986 according to the Law of the People’s Republic of China on Lawyers.  The newly established Antitrust Committee is one of the 22 professional committees under the ACLA.  Professional committees are responsible for providing guidance to lawyers regarding their practice, providing opinions and suggestions in the legislation process, and organizing workshops and conferences for communication of the latest development of the law.  We believe that the Antitrust Committee will provide a platform among antitrust practitioners, enforcement agencies, the judiciary and the academics and will play an active role in facilitating development of antitrust law in China.
Continue Reading All China Lawyers Association Launched Antitrust Committee

By Susan Ning, Kailun Ji and Kate Peng


Although the antimonopoly enforcement in China is still in its formative years, the significant progress made by China’s antimonopoly regulators has brought about far-reaching impacts on companies doing business in China.  Recently, the three anti-monopoly regulators, i.e. the National Development and Reform Commission (“NDRC“), the State Administration for Industry and Commerce (“SAIC“) and the Ministry of Commerce (“MOFCOM“) published their latest enforcement achievements, and NDRC for the first time disclosed its case volume to the public.Continue Reading Chinese antitrust regulators provided updates on their enforcement activities

By Susan Ning, Liu Jia and Kate Peng

China’s famous producers of premium liquor, Kweichow Moutai Co Ltd. (Maotai) and Wuliangye Group Co., Ltd. (Wuliangye) recently announced that they would correct their behaviors suspicious of AML violation.  The corrections were said to be made after the companies being “inspected” by the National Development and Reform Commission (“NDRC”) and the relevant provincial pricing administration. It has been the hottest topic on China’s Anti-monopoly Law (the “AML”) after the resounding LCD panel case closed by NDRC in early this month.

Maotai and Wuliangye are both famous Chinese premium liquor brands and the price of their products is relatively high in tradition.  In early January, the companies issued notices respectively announcing punishments on the distributors who sold their products at a price below the lowest resale price set by the companies.  Maotai also punished the distributors who made cross-regional sales. It is reported that the chairman of Maotai even stated in a recent countrywide distributor meeting that the retail price of Feitian Maotai can not be less than 1,519 yuan and the price of group-purchase can not be less than 1,400 yuan, and that Moutai would sternly punish those who breach the price “fortress”. 
Continue Reading NDRC Say No to Resale Price Maintenance – Company should be Cautious on Pricing Strategy

By Mark Schaub, Sun Liang, Wang Ni and Melanie Stoeckert  King and Wood Mallesons’ Corporate  Group

On 17 December 2012 the Chinese Ministry of Commerce (“MOFCOM”) promulgated the Guiding Opinions on Promoting Brand Consumption in China (the “Opinions”). The Opinions are not particularly interesting for what they do but for what they signal as to MOFCOM’s attitude towards brands, and in particular the importance placed upon the building and developing of Chinese brands.

The main concepts embodied in the Opinions are as follows:

Brands Matter

It is clear on a number of fronts, that the Chinese authorities are not content with China being relegated to producing for foreign brand owners or for producing no-name brand products.
Continue Reading Go Forth and Build Brands in China

By Jiang Junlu and Jin Shan King and Wood Mallesons’ Labor & Employment Group

We receive a bunch of unwanted text messages, email spam, commercial calls and mail solicitations every day. All of a sudden, our identities and personal contact information are exposed in public, used by some individuals and institutions for illegitimate purposes with our permissions. We are all the victims of their illegalities.

On December 28, 2012, the Decision regarding Strengthening the Protection of Internet Information (the “Decision”) was passed by the Standing Committee of the National People’s Congress, which was implemented on the same date. The era of online information protection begins.
Continue Reading How to Protect Our Online Personal Information