How Chinese enterprises live in freedom, competition under the rule of law

China has thoroughly amended its corporate law and hastens to formulate an anti-monopoly law. To rebound then deny the planned economy once adopted, China firmly practices marketization reform. However, common-recognized rules haven’t taken shape without sufficient gaming and, lots of quick introduced legislations are only superficial provisions. As the trend of corporate legal system in developed countries, freedom and responsibility are the two contraries but not contradictory directions during the recent reform of China’s corporate law. One is deregulation, e.g., introducing one-person company and the transition from approval system to registration system for the establishment of a company; while the other is adding various provisions of responsibility and liability to the Company Law for controlling shareholders, actual controllers, directors, supervisors and top managers. The Anti-Unfair Competition Law of China not only prescribes unfair competition but also counters monopoly. In general, it mainly focuses on anti-monopoly provisions, to popularize the concept and value of free market, making systematic regulations on any kinds of monopoly. This article reviews its background, process, meaning as well as the problems encountered. As there remains somewhat a mystery that China rapidly develops, it may also reflect a fringe of the reason. Prepared for presentation at the Global Fellows Forum, the Hauser Global Law School Program, New York University School of Law, 25 October 2006. The author is a global research fellow of the Hauser Global Law School Program, NYU School of Law. He is grateful to Jerome Cohen, Eleanor Fox and William Allen for most helpful comments, to J. H. H. Weiler for aborative presiding, and to Hua Xiao, Justin Fong, Alex Wang and Han Han for English language assistance.