China's National Development and Reform Commission or NDRC planned to examine big industries such as petroleum, banking, auto and telecommunications as part of its ongoing investigations on anti-trust violations in the country. This was reported on China's Central Television as they quoted Xu Kunlin, head of the commission's anti-monopoly bureau on one of their programs.
According to official media reports, in the last three years, NDRC had already conducted around 20 price investigations on some local and foreign companies in the country. Last week, it imposed penalties on 6 milk powder companies for anti-competitive behavior.
As the world's second largest economy, China has been taking steps to relax interest rates. To give commercial banks the opportunity to attract borrowers, the central bank had removed controls on bank lending rates last month.
At present, NDRC is investigating 60 local and foreign pharmaceutical firms for over-pricing. Even though, investigations have recently received criticism about the price of medicine, milk powder, luxury cars and jewelry.
As planned, the NDRC will step up probes in the petroleum, telecommunications, banking and automobile sectors. This recent move was somewhat unexpected in China due to the presence of state-owned and controlled companies in the said sectors.
State owned companies, PetroChina, Sinopec Corp and CNOOC Ltd currently dominate the oil and gas industry in China while domestic prices are set by the NDRC. Likewise, the three largest telecoms firms in the country also owned by the state, namely: China Unicom Ltd., China Mobile Ltd., and China Telecom Corp Ltd. In addition, the top four banks are all controlled by the state
In China, foreign executives and bankers are unsure of the motivations behind the investigations and how they will affect business.
CCTV gave no further details on the probe while NDRC officials were unavailable for comment
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