Direct government intervention in market activities will harm fair competition, says a signed article in Shanghai Securities News. An excerpt follows:
The Ministry of Commerce (MOC) headed an activity to select "famous Chinese wines" last September.
Now Henan Baofeng Wine Co has filed a suit with the Beijing Second Intermediate People's Court accusing the ministry of unlawful administrative behavior.
The company thought that its Baofeng Wine had already been graded as a "famous Chinese wine" by the appropriate departments so it did not register for the ministry's new wine grading activity. But when the MOC publicized the best-selling famous wines list last month, many traditional "famous Chinese wines", including Baofeng, were not included. The company believes this activity has restricted fair competition.
Selecting famous brands is a market activity and should be conducted by the market or intermediate organizations, not the government.
There are many problems in government-led selection of famous brands. First, the competition is limited to products whose manufacturers pay to compete. Second, the government is both the rule maker and an interested party in such activities.
These activities held by government departments place a heavy burden on enterprises. They have to spend time and money to participate.
In fact, a government department's involvement in market activities through establishing an organization violates the Administrative Permission Law.
(China Daily May 21, 2007)
