EC State Aid Law And Its Reference For China

Competition is the key mechanism of Market Economy to achieve optimal allocation of resources, improve economic efficiency and enhance social welfare.But in reality, free and fair competition is distorted frequently both by private and government behaviors. Thus, the regulations which restrain the restrictions of competition by private and public forces are the two arms of competition law. They constitute a complete framework of competition law. Since the enactment of the world's first anti-trust law――Sherman Act in US, most scholars have kept focusing on the restriction of private behaviors, namely, how to restrain the monopoly agreements, abuse of market dominant position and merger. However, the study for the restriction of competition by government behavior is relatively neglected.In China, the value of competiton for improving efficiency and social welfare is reflected and recognized increasingly, since the opening up and reform of economic system. With the development of Market Economy, however, lots of anti-competitive behaviors, particularly government interruption by administrative monopoly, distort the competiton seriously. There are provisions for the restriction of competiton by government in the competition law (anti-trust law) of U.S., E.U. and Eastern European countries. And the State Aid Law of E.C. Competiton Law is the most scientific and comprehensive. It is a pity that Chinese scholars concentrate mainly on the Article 81st, 82nd of E.C. Treaty and Merger Guidelines, The study on the 87th to 89th state-aid- related articles is relatively lacked off.The research on the state aid control of EC Competition Law is helpful to remedy the defect in the research on EC Competition Law, and helpful to improve and perfect the fair competition system as well. There are many problems in the process of granting and implementing of state aid in China, such as the tremendous fiscal burden caused by a large-scale state aid, the subject which granting state aid and its power and duty is confused, the procedures of granting are unopened and untransparent, the means of judicial remedy related to state aid is unavailable,most of all, central and local government and their departments do not take the fair compete- tion into account when they granting state aid to specific recipient. Therefore, the research on the definition and elements of state aid, the principles and the systems of administrative and judicial review of EC State Aid Law is very significant to build up the scientific and effective law system on state aid control in China. In addition, the contradictions between state and the SCM agreement of WTO demand scientific and effective law system on state aid control, which must be based on the consideration of protecting fair competition and rationalizing international trade relations as well.