China鈥檚 say on global rules sees rising heft
Print Edition
CHINA’S veto of an alliance between major Western shipping firms shows its growing heft now extends to crucial global competition regulation.
The Ministry of Commerce on Tuesday rejected a proposed cooperation agreement involving the world’s three largest container operators — all Europe-based — citing a negative impact on competition, particularly on Asia-Europe routes.
As the world’s biggest container shipping user, China is a key market for the trio — Denmark’s AP Moeller-Maersk, France’s CMA CGM and the Swiss MSC Mediterranean Shipping Co — and they immediately abandoned the plan.
It marked the first time the world’s second-biggest economy had blocked a proposed move involving solely foreign entities, and analysts said it showed that concerns over the impact on its own companies was crucial.
“The main purpose is to protect the overseas development of domestic shipping companies,” said Jiang Yuechun, director of the Department for World Economy and Development Studies at the China Institute of International Studies.
“Chinese companies are facing more obstacles and all sorts of troubles overseas,” Jiang said, adding it was “obligatory for the ministry to make some efforts regarding the survival and development of companies overseas.”
Until now, merging multinationals have largely had to worry only about US and European regulators. But the changing landscape could also have positive aspects for industries in other countries outside the Western giants.
Mario Mariniello, economist at the Brussels based think-tank Bruegel and a specialist in competition policy and regulation issues, said China has so far taken an overwhelmingly supportive stance as over a five-year period Beijing cleared 97 percent of mergers it reviewed, while most of the rest were approved with conditions.
Just a single merger — between Coca-Cola and Chinese beverage maker Huiyuan — was blocked in 2009.
The proposed shipping alliance, which would have been known as P3, had already been given the go-ahead by regulators in Europe and the US, so China’s veto came as a surprise.
In the statement announcing its move, China’s commerce ministry expressed concern, saying the alliance would increase the companies’ “combined capacity in container shipping on Asia-Europe routes” and give them a “substantial increase in market concentration.”
Firms in other countries could also benefit.
“We breathed a sigh of relief to be honest,” said Kim Kyong-Hoon, general manager of Korea Shipowners’ Association.
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