Report of the Competition Policy Study Group
November 2001

Executive Summary

1. This study is conducted by the Hong Kong Coalition of Service Industries, the service policy think tank of the Hong Kong General Chamber of Commerce. Through several “ideas seminars” and “deliberation meetings”, the study group has sought to examine the nature of Hong Kong’s free market, the regulatory situation in Hong Kong, and the merits and otherwise of a competition law and competition authority.
2. Every now and then there are critiques of Hong Kong’s market place as being not competitive due to the prevalence of monopolies and cartels. The study group do not find sufficient evidence to substantiate these claims. Instead we see the Hong Kong free market as a dynamic process which involves the interplay of many different sectors in a small but open market place.
3. Hong Kong businesses are concerned with competing on a level playing field in other markets. From a practical point of view, competition, market access and non-discriminatory treatment are all of equal importance in international markets.
4. The Chamber believes in the self-regulatory approach in promoting competition, and the HKCSI has promulgated a Guideline on establishing codes of practice on competition accordingly. Already self-regulation is practised to different degrees by different industries.
5. Where government regulation is justified, e.g. those with a strong public interest, The present light-handed approach should be maintained. Any government regulation should thus be specific to the sector in question.
6. The study group has examined the competition law regimes of other countries. Our finding is that the cost effectiveness of a competition law and competition authority has not been established. We conclude that there is no strong case for a competition law for Hong Kong. Furthermore, the experience of other countries suggests that many administrative problems will be encountered in enforcing a competition law.
7. The study group concludes that competition should be promoted through an advocacy programme emphasising a market-led approach, undertaken as a collective effort of both the government and the private sector.
8. The study group recommends that the role of the Competition Policy Advisory Group should be broadened. Besides overseeing generic issues, it should also identify sectoral issues as well as monitor international developments. Its operation should be more transparent and its membership expanded to include non-officials, particular representatives from the business sector.

COMPLETE REPORT