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Title: The supermarket sector in China and Hong Kong : a tale of two systems
Authors: Williams, M
Issue Date: 2006
Publisher: CLaSF
Source: Competition law review, 2006, v. 3, no. 2, p. 252-268 How to cite?
Journal: Competition law review 
Abstract: The supermarket sectors in China and Hong Kong have different histories, structures and competition-related problems. In China, after 1949, all large-scale retail operations were nationalised. Local government control of supply chains and retailing meant there were no nationally organised chain stores. The retail sector was highly fragmented and faced little, if any, competitive pressure. Only in the 1980’s did the system change with an abandonment of the formal state plan, the liberalisation of agriculture, and acceptance of small private retailers. By the mid 1990s, various local governments across China encouraged international grocery firms to establish retail chains and grocery hypermarkets. The massive investment by foreign retailers has had a dramatic effect on the sector in major cities and has caused alarm and despondency amongst local retailers who have agitated for protection against the alleged ‘monopolistic’ practices of the foreign giants. The national government has commissioned reports and new regulations are slated to address these issues. In Hong Kong, the traditional laissez-faire economic policy of the former colonial government has been continued by the post-1997 administration. This has allowed the creation, by market forces, of a supermarket duopoly that has in excess of 80 per cent of the local supermarket trade. The incumbents are both subsidiaries of local property conglomerates and given local conditions the ability of newcomers to enter the market is restricted by high barriers to entry. As Hong Kong has no general competition law complaints have not resulted in any government intervention in the sector. This complacent attitude is likely to change given the recent publication of a government-sponsored Competition Policy Review Committee report that recommended the enactment of a general competition statute which would include powers to investigate and sanction abuses of dominance.
ISSN: 1745-638X
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