China's cabinet approves anti-monopoly law

BEIJING, June 7 (Reuters) China's cabinet approved in principle an anti-monopoly law today that it said would protect fair competition as its economy develops.

The draft must still go through the formality of deliberation at a Standing Committee meeting of China's rubber stamp parliament before it comes into effect.

''Our country's anti-monopoly rules have not adapted to the development of the socialist market economy and the needs of participating in international competition,'' the State Council, or cabinet, said in a notice on the official government Web site (www.gov.cn).

China needs a systematic and comprehensive anti-monopoly law to protect fair competition and maintain an orderly market environment, the notice said.

The Organisation for Economic Cooperation and Development has said such a law would keep potentially unfair behaviour by multinationals in check and create a more level playing field in a nation where foreign firms are gaining market shares.

But some foreign executives fear China may use the law to target foreign firms if it sees them as controlling too great a share of certain markets.

Sheng Jiemin, a law professor who was involved in drafting the anti-monopoly law, has said it must be applied fairly and without discrimination but that it should also be used to protect the interests of local firms.

REUTERS SHB PM1742