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China Competition law

After 13 years in the making, China’s Anti-Monopoly Law (AML) came into effect on 1 August 2008 and provides a comprehensive framework for regulating market competition in the PRC. It has since been supplemented by a number of implementing rules and guidelines. The Anti-Monopoly Law prohibits three types of monopolistic conduct, namely:

  1. “monopoly agreements” (i.e. anti-competitive agreements) made between business operators;
  2. abuse of a dominant market position; and
  3. concentration of business operators (i.e. mergers and acquisitions) that may have the effect of eliminating or restricting competition.

In addition, Chapter V of the AML prohibits the abuse of administrative powers to restrict competition – a highly controversial subject during drafting of the AML.

From 2011 to 2018, China’s competition laws have been enforced by three separate government authorities, each with complete autonomy as to their respective area of enforcement. The Price Supervision Bureau of National Development & Reform Commission (NDRC) was responsible for regulating price-related infringements of the AML, the Anti-Monopoly and Anti Unfair Bureau of the State Administration for Industry and Commerce (SAIC) dealt with non-price related infringements and the Anti- Monopoly Bureau of the Ministry of Commerce (MOFCOM) was responsible for merger control review.

In March 2018, China’s National People’s Congress passed legislation to consolidate the three antirust bodies of MOFCOM, SAIC and NDRC into one agency, the State Administration for Market Regulation (SAMR), aiming to concentrate all antitrust regulation and enforcement authority. SAMR consists of 27 bureaus and local counterparts of SAMR were also set up in 2018 at provincial level.

In September 2019 SAMR integrated relevant rules on monopoly agreements, abuse of dominance and abuse of administrative power by the NDRC and the former SAIC and released three new sets of rules and regulations (New Provisions), expecting to provide clearer guidance in the enforcement of AML:

  1. Interim Provisions on Prohibiting Monopoly Agreement (IPPMA);
  2. Interim Provisions on Prohibiting Abuse of Dominant Market Positions (IPPADM); and
  3. Interim Provisions on Prohibiting the Acts of Eliminating or Restricting Competition by Abuse of Administrative Power (IPPAAP).

Each of the New Provisions is more comprehensive and provides clearer guidance on the relevant articles of AML by including both substantive and procedural provisions. For example, in IPPMA, it clarifies the factors that should be considered when applying the “Monopoly Agreements” section in the AML. It also adjusts leniency system where it sets different levels for the reduction and exemption of penalties, which may make the leniency system produce a better incentive effect. In the meantime, SAMR and its local counterparts have issued antitrust compliance guidelines including Anti-Monopoly Compliance Guidelines for Business Operators and other Guidelines of SAMR in provincial level. These guidelines encourage companies to establish robust compliance management system including reporting, evaluation, risk management, and training and awarding mechanisms.

Further, in January 2020, SAMR published a public consultation paper, proposing to amend the AML which aimed at creating a better business environment for both domestic and foreign business. There is no fixed timetable for the adoption of these amendments.

Anti-monopoly review process

Previously in the event of certain foreign acquisitions of PRC enterprises or businesses which led to a business concentration, a pre-merger notification would need to be submitted to the MOFCOM for approval. Now the Anti-Monopoly Bureau of the SAMR are responsible for enforcing the merger control regime in China and no transaction under the merger review regime can be implemented without SAMR clearance. According to the Circular of the General Office of State Council on Establishment of Security Review System Pertaining to Mergers and Acquisitions of Domestic Enterprise by Foreign Investors, foreign acquisitions in the following industry sectors which result in a foreign investor assuming control of a domestic target shall be reviewed under the security review regime:

  • military-industrial and military related enterprises; and
  • major farm products, energy and resources, infrastructures, transportation services, key technologies and major equipment manufacturing involving in the national security.

Under the AML of the PRC, such notification would be required if the concentration triggers any of the following thresholds:

  • combined worldwide turnover of all business operators exceeds RMB10 billion in the immediate preceding fiscal year and the domestic turnover of each of at least two business operators in the immediate preceding fiscal year is more than RMB400 million; or
  • combined domestic turnover of all business operators in the immediate preceding fiscal year is more than RMB2 billion and the domestic turnover of each of at least two of the business operators in the immediate preceding fiscal year is more than RMB400 million.

If business operators implement a notifiable concentration without notifying the SAMR and obtaining the SAMR’s approval, it may be ordered to halt the transaction and/or the shares be disposed of or the business be transferred by a certain deadline.

The Anti-monopoly Bureau of SAMR envisages a two-stage process for reviewing concentration transactions, namely a preliminary review and a potential further review. The preliminary review will generally take 30 calendar days and the SAMR will usually grant merger clearance within the preliminary review stage if the transaction does not raise competition concerns. For a complex transactions that may raise competition concerns, SAMR will conduct a further review of up to 90 days, which can be extended to another 60 days of advanced review.


Anti-monopoly law

NDRC rules

China competition law

China Anti-monopoly law

PRC Anti-monopoly law

Chapter V of Anti-Monopoly Law AML

National Development & Reform Commission NDRC rules

State Administration for Industry and Commerce SAIC

SAIC Rules

China Price Law

Ministry of Commerce MOFCOM

Anti competition laws
Chinese competition law definition