Different interpretations of “socialist market economy”

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Develop the true aims

The AML took 13 years to draft. It was not because it was a hard or complicated law in it-self. AML is not more complex than other competition laws and as shown it is very much based upon the EC-treaty and covers the general competition concepts. So how come the drafting took such a long time? Part of the reason could be that it was rewritten many times and certain articles were discussed and changed back and forth. Several experts and foreign lawyers had the opportunity to comment on the drafting and the authors got the opportu-nity to meet some of them and listen to their point of view. Still, the drafting process is not a procedure which should have taken 13 years. The authors do not believe that the delay was a coincidence but carefully planned. The PRC Government had to examine if the country was able to adopt a competition law and introduce competition on the market at the first place.
To adopt AML in 1994, when the drafting began, would have been totally impossible due to a number of factors. The theory of competition was practically not even known in China at that time. Except certain well-educated experts, the general Chinese population was unfamiliar with competition on the market. China’s long history of planned economy has promoted state owned monopolies for ages. The monopolies could not simply be removed over a night and neither wanted the PRC Government to do so. Transformation from a planned economy towards a more open market takes time. The saying by Deng Xiaoping “to cross the river by feeling the stones” indicates that it will take a long time to develop a competition culture in China.
Ten years after the drafting began the theory of a competition was a little bit more well-known in the Chinese society but awareness had still to be created step by step and the PRC Government had to examine if it was even possible to take such a prominent step to-wards a market economy without losing control. More important, the PRC Government had to examine what they really wanted to achieve when compassing a comprehensive competition law. Was the objective to copy competition laws from sophisticated market economies and strive towards a market economy? No, of course not. The aims of the AML had to be scrutinized in order to suit the special needs for China.

The concept of socialist market economy

The PRC Government could never have stated that the purpose of the law would be to strive towards a healthy development of a market economy. The aim of striving towards a development of a socialist market economy will enable the PRC Government to keep the traditional Chinese values and uphold their powers.
The fact that the concept of a socialist market economy does not have any prominent defi-nition is neither that a coincidence. The PRC Government has chosen to leave the concept undefined standing as an umbrella over the other aims in article 1 of AML and influence the interpretation of those. This gives the PRC Government flexibility to interpret the con-cept in accordance with present political views and also enable the PRC Government to change interpretation over time. No one knows better how a socialist market economy is upheld and ruled but the PRC Government which introduced the concept.
The authors agree with Mr. Zhan Hao and Mr. Diarmuid O’Brien that no one can say what the concept really means but it surely includes strong economic development. China strives to catch up economically with the developed countries which is indicated by the terminolo-gy market economy. The word socialist can be interpreted as to point out that the PRC Government is dedicated to uphold their strong powers and overlooks economic policies from Western countries. Consequently, when studying the notion of socialist market econ-omy, the word “socialist” will be favored when interpreting the aims. A socialist market economy will therefore be interpreted from a socialist view and strive towards what is beneficial for a socialist society which also will be revealed in the enforcement procedure.
SOEs will therefore be favored before foreign enterprises in a dispute. “Market economy” arises from sophisticated market economies and could indicate that China is moving for-ward and loosening up a little bit of the strong believes in communism and planned econ-omy. Still, “market economy” will be very much shadowed by the word “socialist”. The Chinese notion of socialist market economy is a result of a socialist state. The notion of socialist market economy is similar to the notion social market economy which could be confusing and give imaginations that China is willing to develop a sophisti-cated market economy which is found in the EU. But there is a major difference between a sophisticated market economy and the aim to establish a socialist market economy.
A so-phisticated market economy would have limited the powers of the PRC Government which is far away from the leaders’ ideology of how the country should be lead. The Chi-nese economy is not even close to be called a sophisticated market economy. Even though the PRC Government shows a willing to strive towards a more market-based economy to stay competitive on the international market it does not intend to lose the powers of lead-ing China in different directions.

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1 Introduction .
1.1 Background .
1.2 Hypothesis
1.3 Purpose .
1.4 Method .
1.5 Delimitation
1.6 Outline
2 Article 1 of AML 
2.1 Aims in article 1
2.2 Different interpretations of “socialist market economy” .
2.2.1 Strong economic development .
2.2.2 Powers to the PRC Government
2.2.3 Economic liberalization
2.2.4 Decreasing number of SOEs .
2.3 Development of the concept .
2.3.1 1954: become a socialist society ….
2.4 Analysis chapter 2 .
3 The AML and competition concepts 
3.1 Competition concepts .
3.1.1 A competitive market
3.1.2 Perfect market definition
3.1.3 The market in China .
3.1.4 Monopoly .
3.1.5 Monopolies in China .
3.2 The AML
3.3 Analysis chapter 3
4 Objectives for adopting AML
4.1 Economic development
4.2 Requirements from WTO .
4.3 Control administrative monopolies
4.4 Protect national champions
4.5 Analysis chapter 4
5 Establish Competition: 1st Element 
6 Establish Competition: 2nd and 3rd Element .
7 Lack of Legal Certainty in China 
8 Conclusion 
9 Further Discussion: The Future Interpretation 
References

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About the aims of China’s Anti-Monopoly Law -With special reference to the concept of socialist market economy

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