National Development and Reform Commission

NDRC expected to retain key antimonopoly role amid revamp

The agency is likely to be given more powers to assert itself in price fixing and monopoly cases

PUBLISHED : Monday, 03 March, 2014, 2:58pm
UPDATED : Tuesday, 04 March, 2014, 1:51am

China will present proposals to revamp its behemoth economic planning agency at an annual parliamentary session this week, sources said, but the organisation’s role as an antitrust regulator could eventually be enhanced.

Chinese and foreign companies, including US technology firms Qualcomm and InterDigital, have fallen afoul of the National Development and Reform Commission (NDRC) in recent months as its antimonopoly arm has become more assertive.

The mammoth agency, which has several thousand employees and has sweeping powers to decide on investment, prices and other issues in the world’s second-biggest economy, is striving to retain as much power as possible as it undergoes restructuring.

The crackdown on price-fixing and monopolistic practices should become more pronounced, as the NDRC has said it is ramping up staffing in its antitrust division.

Academics and senior officials have forecast a streamlining of the NDRC since President Xi Jinping vowed to make the economy more responsive to market forces and shift to consumer-focused investment from a state-led model.

Two sources close to senior leaders said proposals have been readied to restructure the NDRC and that these will be discussed at the National People’s Congress annual session beginning on Wednesday.

It was not immediately clear if any decisions would be taken.

But the NDRC’s role as one of three national antitrust regulators – along with the Commerce Ministry and the State Administration for Industry and Commerce – is set in the country’s five-year-old Anti-Monopoly Law, which is unlikely to be cut back or revised soon.

“The NDRC is getting ready for a new role. This corresponds with the flurry of antitrust actions,” said a Beijing-based foreign diplomat who asked not to be named.

Having a relatively independent, authoritative or strong and unified antitrust body is a trend. Many antitrust structures around the world are under one roof
Xu Kunlin, NDRC

Xu Kunlin, head of the NDRC’s price supervision and antimonopoly bureau, has hinted at more unified antitrust powers, underlining speculation the agency is seeking for primacy among the three regulators.

“Having a relatively independent, authoritative or strong and unified antitrust body is a trend. Many antitrust structures around the world are under one roof,” Xu said last month.

Xu’s comments could be part of the NDRC’s attempt to focus on the antitrust role and stay relevant as its broader powers are slashed, said Chin Yee Wah, a New York-based antitrust expert at law firm Ingram, Yuzek, Gainen, Carroll and Bertolotti.

"The NDRC will continue to expand its AML [antimonopoly law] enforcement scope by the investigations it conducts, and it is entirely possible that some formal restructuring of AML enforcement will be made after several more years,” Chin said.

Last year, the NDRC slapped Chinese and foreign companies with investigations and fines after high-profile pricing probes.

In August, the regulator fined six infant formula manufacturers, including Mead Johnson Nutrition, Danone and Fonterra, a record US$110 million after a probe into price fixing and anticompetitive practices.

The agency confirmed last month it had opened antimonopoly investigations into Qualcomm and InterDigital, saying it had received complaints that the companies charged discriminatory high prices in China.