Author

Huizhen Chen

Date of Award

4-8-2021

Author's School

School of Law

Degree Name

Doctor of Juridical Science (SJD)

Degree Type

Dissertation

Abstract

The merger review of China's Ministry of Commerce (MOFCOM) during the period 2008-2018 has trends significantly toward those of the United States and the European Union. Both Western and Chinese jurisdictions apply a law and economics approach to merger reviews. However, MOFCOM, unlike the West, issued behavioral remedies more frequently than structural. The West generally believes that MOFCOM issued behavioral remedies for political policies, such as protection of domestic companies. However, decisions such as the 2014 Corun/Toyota China/PEVE/Sinogy/Toyota Tsusho and 2009 Panasonic/Sanyo cases illustrate that MOFCOM issued remedies based on political policies generated by the major stakeholder, Corun, rather than state interests. This Thesis will show that understanding MOFCOM's decision-making mechanism is essential to understanding the characteristics of Chinese merger reviews, especially from the perspective of the competition policy structure. MOFCOM's decision-making mechanism appears to the West like the proverbial "black box," where the market situation or "input" into the decision-making mechanism (black box) results in remedies or "output" that Westerners have assumed were dictated by state interests represented by MOFCOM. In fact, the "black box" included not only MOFCOM but also other stakeholders in the merger review, such as competitors and merger parties. Thus, China did not adopt the West's hierarchical structure of competition policies prioritizing market efficiency or consumer welfare, but rather Chinese policies manifest a flat structure with equivalent weight distributed among competitors and merger parties. Through a series of review decisions involving the same market or parties, this Thesis will demonstrate that MOFCOM's decision-making mechanism indicates a balancing relationship among decision-makers. Specifically, MOFCOM might share authority with stakeholders or operate conservatively as a self-enforcing institution to regulate potential stakeholders beyond the authority of merger reviews. This Thesis will show that the enormous scope of potential stakeholders creates a far more complex decision-making mechanism within MOFCOM's merger reviews than those of the West. Further, the balancing relationships in MOFCOM's decision-making mechanism determine MOFCOM's unique flat policy structure, an essential characteristic in understanding the process of its merger reviews.

Chair and Committee

Prof. Gerrit De Geest, chair; Prof. John N. Drobak, Examining Professor; Prof. Scott A. Baker, Examining Professor.

Off-campus Download

Share

COinS