China recently established the State Administration for Market Regulation ("SAMR"), which combines the antitrust enforcement responsibilities of the previous Price Supervision and Antimonopoly Bureau of the National Development and Reform Commission ("NDRC"), the Antimonopoly Bureau of the Ministry of Commerce ("MOFCOM"), and the Antimonopoly and Anti-unfair Competition Bureau of the State Administration of Industry and Commerce. Physical integration has begun. As of May 14, 2018, merger filings will be made to SAMR instead of MOFCOM.

In the short term, integration of the three Chinese antimonopoly enforcement agencies into the new SAMR may give rise to some uncertainties and delays for ongoing merger reviews and conduct investigations. However, in the long run, the institutional reform likely will have profound implications. First of all, the new agency will be able to combine the enforcement resources of the previous agencies, thus streamlining the enforcement process and optimizing the use of resources for SAMR's enforcement priorities. Second, the allocation of enforcement authority between the previous agencies was not always clear, so the combination of three antitrust authorities into one will resolve this tension created by overlapping jurisdictions. In addition, it is hoped that the new agency will be able to harmonize the inconsistent rules and practices of the previous three agencies to increase the predictability of competition law enforcement for market participants. Furthermore, the new SAMR, as a market supervisor instead of regulators in charge of industrial and trade policy, may facilitate independent antitrust enforcement. Finally, the consolidation of the agencies into SAMR likely will smooth the legislative process after their initial institutional integration by removing conflicts and competition among the legacy enforcement agencies.

We will  publish a more comprehensive analysis of this matter in the coming days.

Lawrence Wang, an associate in the Beijing Office, assisted in the preparation of this Alert.