Encore une preuve du libéralisme hongkongais

[Timur]

Keeping Hong Kong Competitive

Dropping a proposed antitrust law is smart for the economy

Credit Hong Kong's government for doing something smart for the economy -- by doing nothing. Policy makers last week removed a long-discussed competition law from this year's legislative agenda, shelving a costly bad idea for at least six months and maybe for a year or more.

Officially, the proposed legislation is still alive while "technical issues" are worked out, as the government puts it. But we like to think that wise heads at Government House understood that a global economic slowdown is the wrong time to introduce a law that would impose heavy compliance costs on companies. While a draft hadn't been finalized, last summer's discussion paper had floated the idea of creating a competition commission to investigate alleged anticompetitive behavior, and proposed a tribunal that could fine companies up to 10 million Hong Kong dollars (US$1.3 million) for violations.

It probably also helped that in recent months local businesses started speaking out against the measure more aggressively, raising the specter of a bruising political battle that Government House would just as soon avoid during a contraction.

No one has ever fully explained why the world's freest economy needs a competition law, despite at least a dozen years of proponents trying to make the case through study committees and consultation papers. Although many sectors are dominated by duopolies, barriers to entry in Hong Kong are so low that new competitors can always enter if entrepreneurs spot opportunities to better serve consumers.

The only parts of the Hong Kong economy where competition is constrained are where the government has gotten involved. See the government-sanctioned monopolies like the Hong Kong Jockey Club's stranglehold on gambling, or government-fostered cartels like the property firms that thrive on their ability to navigate Byzantine government land auctions.

The Commerce and Economic Development Bureau's point man on competition, Greg So, says the government still is working on a draft law and intends to introduce it as soon as possible. Let's hope they reconsider. Hong Kong's prosperity was built on a policy of "positive nonintervention." Ditching the competition law, at least for now, is a welcome return to the territory's roots.

http://online.wsj.com/article/SB1236282113…eTabs%3Darticle