Construction of Competitive Order: A Study on Administrative Restraints of Competition

Author: Yuan Zhuojie
Publisher:
Publish Date: 2003-07-01
Features: The research of this book aims to propose and argue a fundamental proposition: the proper positioning of administrative acts is key to establishing and safeguarding competitive order. To this end, the author analyzes several major competition theories and concludes that: in modern society, the theoretical foundation for establishing competitive order in China is contestability theory. Based on this theory, the book conducts an in-depth exploration of the logical relationship between administrative acts and competitive order. The argument for the fundamental proposition is composed of the following five chapters: Chapter 1 proposes the proposition and its analytical framework. Under market economy conditions, the state's protection of the competition mechanism not only ensures that certain markets are contestable but also ensures that the national economy system is competitive, i.e., that the competition mechanism becomes the basic and dominant operating mechanism in economic life. The competition law established under the guidance of contestability theory helps to address this major issue. Chapter 2 provides a panoramic view of administrative restrictions on competition. Mainly based on China, it systematically analyzes the complex social, political, economic, and cultural reasons for the emergence and persistence of administrative restrictions on competition. The author explains this from three perspectives: market failure, institutional transition, and industrial development, as well as empirical theory. Chapter 3 analyzes the damage caused by administrative restrictions on competition to the competition mechanism. This is manifested in: damage to the market conditions for competition, i.e., reducing market size or hindering its expansion; and damage to the institutional conditions for competition, including property rights systems and competition law systems. On this basis, the economic consequences caused by administrative restrictions on competition are also summarized. Chapter 4 argues that restricting specific competitive freedoms is a safeguard for the competitive system. First, it proposes the justification for the legitimacy of administrative restrictions on competition, then analyzes how institutionalized transaction information and mandatory rules can promote the expansion of market size and ensure the competitiveness of the national economy system. Chapter 5 elaborates on institutional arrangements to constrain administrative power. It suggests improving the institutional constraints on administrative power from both legislative and judicial perspectives, strengthening the institutional rules of antitrust law that prohibit administrative restrictions on competition, and establishing two implementation mechanisms for antitrust law: administrative enforcement and judicial review.