Foreign enterprises won't become monopolies
(chinanews.cn)
Updated: 2006-10-19 14:33
Foreign companies in some industrial sectors in China have occupied more and
more market shares in this country. Can it be said that these industrial sectors
are already under the control of foreign companies？In response to this question,
Wang Zhile, director of the Multinational Company Research Center under the
Ministry of Commerce recently said that taking more market shares did not mean
that foreign companies had become monopolies in these sectors. In fact, foreign
companies will not become industrial monopolies in China, he said.
He explained by saying that firstly, we should not regard all foreign
enterprises in a certain industrial sector as a whole rival group to Chinese
enterprises, for competition exists even among foreign enterprises. Secondly,
the large market share can only mean that foreign enterprises have dominated the
related market alone, which is only one of the preconditions for the formation
of a monopoly.
The most important factor to judge the existence of a monopoly is to see
whether large enterprises have limited competition by taking advantage of their
large market shares. At present, some foreign enterprises in China do control a
large market share in some industrial sectors; however, no foreign enterprises
have so far used their advantageous postion to limit competition, he said.
He stressed that currently, no Chinese industrial sectors have ever been
controlled by any large foreign enterprise. In the short term, it can be said
that no foreign enterprises can become a monopoly in any Chinese industrial
sector. (For more biz stories, please visit Industry Updates)
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