Macroeconomics Case Study

Competition Laws in China and India: Dragon’s divergence and Elephants convergence

OR

Abstract:
More than 100 countries have adopted competition laws and policies around the world. The OECD member countries have all enacted competition law in their respective countries. Competition law and policy is the tool which OECD countries have used more and more to reduce inefficiency and waste. Some economists think competition law act as economic growth boosters. Realising the importance of having a competition law China on August 1st 2008 enacted its first competition law called as the Anti Monopoly Law (AML). And India soon will implement its new competition act.

The case study analyses the data of various countries to find out at what point of economic development they adopted a competition law and whether competition laws act as economic growth boosters or not.

The case attempts to answer some interesting question like, what impact the strong antitrust laws of India and China will have on the global deals and Mergers and Acquisitions (M&A)? Will India be able to effectively deal with the wide spread cartel’s in its economy? Will AML be able to treat China’s wide-spread and intensely condemned administrative monopolies? Will China deal fairly with the foreign MNCs or will it be selectively using the AML against them? And finally do India and China have the legal infrastructure and expertise required for the effective implementation of competition laws?

Pedagogical Objectives:

• To analyse at what point of economic development OECD countries adopted competition law/policies and to understand whether the implementation of competition laws resulted in boosting economic growth or busting economic growth
• To understand the existing state of competition and regulation in India and China and the challenges in implementing the new competition law in both the countries
• To analyse how competition laws of India and China will affect the global deals.

Keywords : OECD countries, OECD member, China and India, Anti Monopoly Law (AML), competition act, competition laws act as economic growth, economic development, GDP and happiness