Changing global dynamics and international competition law: Considering China’s potential impact: A rejoinder to Professor Fox

I am honoured and grateful that Professor Fox has engaged with and responded in such a thoughtful manner to the various issues that I raised in my article ( “Changing Global Dynamics and International Competition Law: Considering China’s Potential Impact“) published in the latest issue of EJIL (Vol. 30 (2019) No. 4).  Even though our views have been framed as a debate, Professor Fox and I actually agree on many substantive points!

Both of us are quite realistic and matter of fact about the implementation of China’s competition law and its compatibility with international norms, whether that be in its approach or outcomes. We both believe that China’s approach to competition law:

• Is not sufficient to constitute a model of competition law;

• Is borne from China’s specific circumstances and needs to be understood on its own terms;

• Is not necessarily one that can – or should – be replicated by other countries;

• Departs from international norms, both in its philosophy and in a number of its outcomes; and

• Is unlikely to challenge international competition law norms.

We also agree that international competition law norms are based largely on US and EU paradigms and that such norms may not necessarily be directly relevant for countries that do not subscribe to the same market/state relationship or that have particular development needs.

Nonetheless, there are some points made by Professor Fox in her reply to which I wish to respond and clarify.

First, I do not claim that China’s approach to competition law constitutes a “competition law model”. In fact, I deliberately do not apply the term “model” to describe what China is doing with respect to its competition law. Instead, I call it an “approach” throughout my article, precisely to avoid the implication that I believe that China’s approach to competition law is one that can be followed by other countries. Unfortunately, competition law discussions often use the term “model” without properly engaging with the fundamental issue of what is necessary and sufficient to constitute one.

Professor Fox and I agree that China’s approach is not sufficient to constitute a model, but I suspect that we come to this from quite different positions. From my perspective, for competition law, which touches upon the fundamental relationship between the market and the state, a model needs to be something more than just the terms that are used in a statute, the interpretation of those terms, and the enforcement mechanism. That is why, whilst I outline in the article some features of Chinese competition law that seem to be quite distinct to China and which depart from international norms, I certainly do not believe that these features are sufficient to warrant China’s competition law being called a “model”.

Second, Professor Fox takes exception to my use of the term “implemented understanding” to distinguish between the formal reception of international competition law norms into the domestic context and how those received norms are understood and implemented domestically, calling it a camouflage. I respectfully disagree, and it may be helpful here to explain further why I think its use is justified.

“Implemented understanding” captures something more complex and nuanced than what Professor Fox describes as “China’s framing industrial policy decisions in terms of international standards” and “China does not disagree with the international norms in principle, but may disagree on outcomes.” That China might use competition law to pursue industrial policy outcomes and frame those decisions in the language of international norms stem from more than a simple disagreement about outcomes – it comes from a fundamentally different philosophy about how markets should work and to what end, the role of the state in markets, and the role of competition law in this state/market relationship. It is this philosophy that shapes how China understands and implements those norms – and in some way transforms them – domestically. Therefore, the term “implemented understanding” does not camouflage or imbue China’s approach with virtue; instead it is usefully explanatory.

More broadly, Professor Fox and I come to the issues raised in the article from quite different perspectives and therefore draw different observations and implications. Professor Fox looks at the article from the point of view of developing countries, considering whether China’s approach to competition law might be one that is useful for them. For Professor Fox, not only is the state/market relationship an important factor in considering whether a competition law may be fit for development, it is also essential for a competition law to “embed the value of inclusiveness” and “make markets more open and friendly to entry.” Given her perspective, it makes sense that she regards South Africa’s competition law as a more suitable alternative for developing countries and other countries in general.

By contrast, for me, whether developing countries might look to China’s approach to competition law is but one aspect of considering the potential transnational ramifications and relevance of China’s approach. This is in turn part of the broader enquiry into how China engages with international competition law norms and whether China might influence those norms. This wider question is one that is worth exploring because China’s economic power and reach into other countries, combined with its increasing assertiveness in the international arena, means that it could potentially challenge the US’s and EU’s dominance on the world stage, should it wish to. In fact, in some areas of the law and governance (such as Internet governance), what China has done domestically has already influenced how other countries have decided to regulate their own markets and governable spaces. As a result, unlike Professor Fox, I do think that China’s approach is at least useful as an alternative reference point for other countries. It presents a view of competition law that is quite different to that of the US, EU, and developed countries, even if how it is actually put into action is sui generis to China. There is value in having an alternative voice in the global competition law arena, especially one that seems to be speaking about concerns and goals that other countries share and implementing competition law in a way to address those matters. Whether you agree or disagree with China’s approach, be that in its form, perspectives, and outcomes – well, that is a separate matter and one upon which I express no opinion, whether in my article or on this post, and will leave up to the reader to decide!