BEIJING (Reuters) - Draft anti-monopoly rules issued by China propose restrictions on price agreements that could apply to deals reached by foreign companies beyond the country’s borders, potentially in mining and other sectors.
The draft rules were issued for public comment by the National Development and Reform Commission (www.ndrc.gov.cn), the nation’s top economic planning body, late on Wednesday, and they build on China’s anti-monopoly law passed in 2008.
The draft document makes clear that Chinese regulators could put foreign multi-nationals, which sell in China, in their sights when enforcing the proposed regulations against price-fixing deals.
“These regulations apply to monopolistic pricing behavior outside the People’s Republic of China that produces an exclusionary or restrictive impact on domestic market competion,” the Chinese-language draft states.
The rules flesh out provisions already in China’s anti-monopoly law. But they appeared at a time when Beijing is in contentious negotiations with foreign iron ore producers over sales agreements.
That joint venture needs to be cleared by regulators in Europe and in China, offering Beijing an opportunity to wield its anti-monopoly law.
The Chinese steel industry is adamantly opposed to the BHP-Rio joint venture, as are their counterparts in Europe and Japan, because they fear giving more pricing power to the two mining giants.
The proposed Chinese rules could apply to “monopolistic price agreements” whereby “operators in a competitive relationship” fix or alter prices, restrict the extent of price shifts or “use a uniform price as the basis for negotiations with a third party.”
They could also apply to restrictions on sales volumes used to fix or alter prices.
The regulations are open for public comment up to September 6. They could punish deals found to be illegal by confiscating earnings and imposing fines of up to 10 percent of the offender’s sales in the previous year.
Reporting by Chris Buckley; Editing by Ken Wills
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