When most Chinese regard the effect of the global financial crisis has faded, 2010 was a significant year for the Chinese insurance industry; eventful and full of challenges.

In 2010, the Chinese insurance market remains the sixth largest insurance market in the world with respect to its premium income. The value of the country’s insurance assets is over 4,000 billion RMB. Compared with the situation in 1980, when the Chinese insurance market was a completely monopolized market, there was only one insurer and the total premium income at the time was 0.46 billion RMB, the insurance industry now plays an inseparable role in the Chinese society, and causes an essentially important impact on the Chinese economy.

Continue Reading Overall review of 2010 Chinese insurance industry from a legal perspective

Baixiang Food Group and other instant noodle manufacturers have brought a complaint against their competitor Kangshifu, claiming that it unfairly dominates the instant noodle market in China. Kangshifu has also been accused of engaging in price dumping through its subsidiary brand Fumanduo. Kangshifu contests both assertions.

Continue Reading No quick answers in instant noodle dispute

Introduction

The Ministry of Commerce’s Anti-monopoly Bureau approved Novartis’s acquisition of Alcon on August 13 2010, subject to conditions.(1) The ministry accepted the filing in respect of the acquisition on April 20 2010 and decided on May 17 2010 that a further review period was needed. The ministry reviewed information on:

  • the overlap of the two companies’ products in the Chinese and global markets;
  • their respective market shares;
  • the characteristics, applications, prices and sales methods of their products;
  • the supervisory policies in the relevant market; and
  • the two companies’ relationships with competitors in the market.

Opinions were sought from other companies in the field. After negotiating with the filing parties, consensus was reached on how to reduce the acquisition’s undesirable effects on competition in the relevant markets.

Continue Reading Conditional approval for Novartis’s acquisition of Alcon

On August 12th 2010, the Ministry of Commerce held a press conference regarding the development of the antimonopoly practice in China. The Chief of the Antimonopoly Bureau, Mr. Shang Ming, answered questions raised by the journalists. For the first time in 2 years since the China Anti-Monopoly Law (“AML”) came into effect that some of the most controversial questions were clarified directly by the official from the enforcement institution.

Continue Reading Clarification from Senior Official of the Antimonopoly Bureau of the Ministry of Commerce

On July 9, China Insurance Regulatory Commission (“CIRC”) issued a notice concerning assumed interest rate on traditional life insurance to solicit public opinion. Some analysts said CIRC proposes to loosen its control over the assumed interest rate through this notice and expected that the profits margins of traditional life products will shrink following the implementation of this proposal, while insurers will have more flexibility in the design of this kind of policies.

Continue Reading CIRC may Loosen Assumed Interest Rate Control on Traditional Life Insurance

On July 8th, MOFCOM (Ministry of Commerce of People’s Republic of China) released The Provisional Rules on Implementing Divestiture of Assets or Businesses(“Provisional Rules”). This legislative move can be seen as China’s aggressive while at the same time, practical effort in the perfection of Chinese concentration review regime within the framework of Chinese Anti-monopoly Law (“AML”).

So far, China has only slightly less than two years of antitrust enforcement. Yet some antitrust professionals have already been amazed by how China has quickly become the world’s third most important merger control jurisdictions, and its influence is still ascending. MOFCOM, SAIC and NDRC, China’s three AML enforcement authorities, have issued nearly 20 regulations, guidelines, notices and provisions to implement AML in the areas of concentration, cartels, abusing dominance and administrative monopoly.

Continue Reading Divestiture Regulation: A Giant Leap in Chinese Concentration Review Regime

On May 27, State Administration of Industry and Commerce (“SAIC”) published new draft regulations on monopoly agreements, abuse of dominant position and administrative monopoly for public comments. These sets of unveiled draft rules are resulted from pubic opinions and comments which SAIC has collected since June 2010, this is when SAIC first published the draft regulations. Within China’s antitrust law enforcement system, SAIC has the mandate to condemn non-price-related monopoly agreements, non-price-related abuse of dominant position and administrative monopoly. Furthermore, it has mandate to fashion implementing rules for the Anti-Monopoly Law of PRC (“AML”) too.

 

Continue Reading SAIC Published New Draft Rules on Cartels, Abuse of Dominant Position and Administrative Monopoly

Leniency program is an effective tool in exposing cartels. This has been confirmed by over 20 antitrust jurisdictions having leniency program around the world. China joined the club on August 1, 2008, when the Anti-Monopoly Law of PRC (“AML”) came into effect. For the first time, AML expressly recognized leniency program in its intention to condemn monopoly agreements. However, AML only makes a passing reference to the policy in which “undertakings who voluntarily report to antitrust enforcement authorities on monopoly agreements and advance key evidence MAY be reduced or exempted from penalties”. Thus, it takes China’s trust busters to fashion rules to implement leniency policy.

Continue Reading China’s Leniency Program Taking a Hazy Shape

On 4th May 2010, a new regulation was in the spotlight, which was seen as the most important regulation published this year. After three rounds of public discussions, the official Measures on Equity of Insurance Company (hereinafter referred to as the “New Measures”) was promulgated and will take effect on 10th June 2010. It will replace the Interim regulation on investing in insurance company (Baojianfa [2000] No. 49) published on 1st April 2000 and the Notice of Regulating Domestic Insurance Company on Attracting Foreign Investment (Baojianfa [2001] No. 126) published on 19th June 2001. This article aims at picking up some representative questions and presenting answers based on our understanding.

Continue Reading Questions and Answers about Measures on Equity of Insurance Company