Sustaining the Status Quo the use of Conditions in Chinese Merger Clearance

This article investigates the role of conditions or remedies in Chinese merger approvals, drawing conclusions about their use and suitability. The article begins by mapping the changing approach to merger remedies by competition regulators in other major jurisdictions such as the EU, US and Australia. Key trends are noted, such as the decline of a clear preference for structural remedies by regulators and convergence around a proportionality doctrine. The article reviews the operation of the Anti-Monopoly Law (AML) and the more recent merger remedy guidelines (Provisions of the Ministry of Commerce on Imposing Additional Restrictive Conditions on the Concentration of Business Operators (for Trial Implementation)) in this context. Representative Ministry of Commerce (MOFCOM) merger approvals with conditions are examined. These indicate that MOFCOM prefers behavioural conditions which in some instances appear disproportionate or unrelated to the anticompetitive effects of a merger, and tend to maintain the status qua. The article emphasizes how potential reforms to MOFCOM's merger remedy guidelines and the conditions imposed by the regulator might better facilitate proportionate merger remedies, and the efficiencies sought by mergers. The article concludes by considering these issues in a case study of a hypothetical bank merger scenario, set against the background of a socialist market economy and the competitive dynamics of the Chinese banking sector