China's WTO Accession: A New Opportunity for Competition Law Reform

China's WTO Accession: A New Opportunity for Competition Law Reform

As China's anticipated accession to the WTO nears, foreign firms are eager to explore new business opportunities in the PRC. But a key challenge will be handling the reaction of Chinese manufacturers that have been sheltered from foreign competition. Dene Yeaman and Dan Ryan look at the extent to which new market entrants may protect themselves from defamatory attacks on their commercial reputation under Chinese law.

One of the stated goals of China's WTO entry is the promotion of competition within the domestic economy. However, while opening up new sectors of the economy to foreign participation will undoubtedly increase competition and breathe new life into industries that were previously sheltered from competition, it will also likely result in an increase in anti-competitive market behaviour and unfair business practices by domestic enterprises striving to maintain their market position.

This article examines what rights companies, in particular foreign companies, have to protect themselves from attacks on their commercial reputation under PRC law. While certain rights and remedies are currently available to aggrieved companies, PRC law in this area generally suffers from a lack of authoritative legislative guidance as well as from a lack of departmental or judicial interpretation of relevant laws.

Several years after implementation of key legislation, there continues to be considerable uncertainty regarding the use of legal remedies for the protection of a company's commercial reputation against false or misleading statements.