The long-awaited law aims to check anti-competitive behaviour and better regulate the country's rapidly emerging market economy.
Joerg Wuttke, president of the European Union Chamber of Commerce in China, said the chamber hoped the law would contribute to a more open economy and a level playing field for businesses in China.
"Most important, curbing monopolistic behaviour should allow Chinese consumers to benefit from greater economic efficiency and stronger protection against the abuse of market dominance," Wuttke said in a statement. The American Chamber of Commerce in China also welcomed the move, with its chairman, James Zimmerman, saying in a statement that it established "a basic framework" for building a fair, uniform legal system on competition. Both groups, however, expressed reservations.
The European Chamber said its members were concerned about a provision in the draft that would require acquisitions of domestic firms by foreign companies to undergo "national security" reviews. "It is not clear how such a national security review will be applied, especially given that 'public interest' is not defined in the law," the chamber said. "This concern is further underlined by the law's emphasis on the safeguarding of certain state-dominated industry sectors." Other countries, including the United States, also have mechanisms for reviewing foreign investments on national security grounds. Western investors have become increasingly concerned about a backlash against foreign investment, which has manifested itself in a number of high-profile deals being delayed or scuttled.
AmCham said it, too, looked for further clarification on how the law would be applied, including on standards for administrative monopolies, procedures for reviewing transactions on competition and national security grounds, and enforcement. "We hope that China's competition authorities will focus on modern economic principles and prevailing international practices when applying the new law," Zimmerman said.
The European Chamber urged Beijing to quickly publish guidelines, "based on economic models", on the law's enforcement, and to promptly clarify the function of the special enforcement agency to be set up to implement it.