China says only "heavy punches" will dent rising monopoly behaviour

BEIJING (REUTERS) - A heavy-handed approach is needed to halt a rise in monopolistic behaviour by companies in China, a senior official said on Tuesday, in a sign that an antitrust campaign which has already ensnared top global firms could get tougher.

"Only heavy punches will work," Xu Kunlin, head of the anti-monopoly bureau at the National Development and Reform Commission (NDRC), said in a speech to a business forum in Beijing.

"It's easy to find evidence on many firms' monopolistic behaviour in China," Xu said.

"Some of it could be found on the Internet," he added, noting the ease of discovery was the reason why investigations had been so successful this year.

The NDRC is China's top economic planning body but it also regulates prices.

It has launched a spate of antitrust investigations across sectors ranging from pharmaceuticals to milk powder and jewellery in recent months.

In particular, authorities are paying attention to whether manufacturers are forcing retailers to set minimum prices for products, which would contravene a 2008 anti-monopoly law.

China's leaders are trying to restructure the economy to one where growth is driven by consumers, and while Xu did not mention any specific companies or industries, he said investigations would focus more on sectors affecting the lives of ordinary people.

He added that competition policy should be a key economic policy area for China.

Speaking later to Reuters, Xu said authorities had some targets for future investigations but he declined to give specific details.

During his speech, he reiterated that the investigations were not aimed at specific companies or foreign firms.

"It would not be objective to say that the investigations target foreign firms because they involve foreign firms," Xu said, adding that antitrust investigations would become routine and people would get used to them.

The NDRC has launched nearly 20 pricing-related probes into domestic and foreign firms in the last three years, according to official media reports and research published by law firms.

It fined a group of mostly foreign milk powder producers, including Mead Johnson Nutrition Co and Danone, a total of US$110 million (S$137.9 million)for price fixing last month.

The agency is also investigating the pricing practices of 60 local and foreign pharmaceutical firms. Autos, telecoms and banks might come next, regulators have suggested.

Some antitrust experts argue foreign companies have been more vulnerable to regulators since they lack domestic political backing.