Project Proposal
开题报告
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How can the traditional local Cantonese Brands (in Guangzhou & Foshan) survive better, with the emerging of the Land and the Ruling Class?
- A discussion of the importance of Competition Laws in Hong Kong & the Mainland
BY
Bachelor of Business Administration (with Honours) in Accounting
1. Introduction
Competition Laws, as a kind of government intervention which is adopt by nearly a hundred countries, is to ensure fair market competition and avoid certain monopoly or domination of the particular giant firms. After a decade of public consultation, discussion and argument, and legislative procedures, the Hong Kong Special Administrative Region (hereafter, Hong Kong SAR) Government started its competition law ruling in June 2012 in all walks of life. Meanwhile in the mainland, certain legislatures are not well established to promote a “fair and justice” business environment. Nevertheless, to maintain a high GDP growth rate, property developers’ project are always warm welcomed by the mainland authority, which is affecting other sectors.
1.1 Statement of the Problems
1.1.1 The Prosperity for Property Developers in Mainland China
Today’s property market in mainland China has been monopolized by some of the giant private firms and state owned enterprises. This “Monopoly Kingdom” is mainly formed by three force: the land sales driven financial policy, cheap land supply for the property developers, and the collusion between authority and the firms.
The land sales driven financial policy contributes a significant income for local authority. Reported by the Guangzhou daily in 2009, the Guangzhou Government has gained 40.5billion RMB revenue from land sales and the total income of Guangzhou Government was 70.27 billion RMB. In other words, the revenue form land-right sales made up 57.6% of all local-government revenue. Certain land policy act as the most powerful engine to drive major income for the local authority. What’s more there are four ways for the property developers to acquire lands at low prices. The property developer acquisition of the government of the new town development when gives the original land owners for land right book; or charge the land use of the black box operation mode to get cheap land; or get it from farmers with lots of money; or depress price deliberately in the land premium negotiation process. Besides, the collusion between authority and the firms plays an essential role to manage the revenue engine. The absence of Anti-unfair competition law and Anti-Monopoly Law make the developers easier to get cheap land and the high price of real-estate. The government should not only rely on the application list system for acquiring the land. Land auction should be recovered because it can avoid the closed, unfair and partial for acquiring the land.
Deeply considered the facts herein, the interest of the original land users and the tenants become negligible and sacrificed in the eyes of the land sales driven policy, which directly forces the traditional local brands to move away from communities they served then to decline. Particularly in Guangzhou and Foshan (the close cities said to be merged), many traditional local Cantonese brands are suffering higher and higher rental cost and even stamped out without any subsidies once the original properties or the land are acquired by the subsequent developers.
1.1.2 Land and the Ruling Class in Hong Kong SAR
In the closer economic relationship with the mainland and opening up the mainland individual travelling, the whole Hong Kong retailing sector faces an unprecedented development. Meanwhile, the societies start to be aware of that the traditional stores, groceries and smaller supermarkets are gradually replaced by the giant supermarket chains like ParknShop, Wellcome, Watsons, and Sasa etc. which is holding the major market share under the continuous expansion and supported by the giant Hong Kong property developers. The recent competition law is proposed to prevent the giant property developers to abuse their market positions and take unfair advantage to engage in anti-competition activities and keep other competitors out.
Nowadays, the controversies between the general consumers and giant property developers are always put in front of every issues of the Hong Kong people's livelihood. The emerging of the so called "Land and the Ruling Class" increase the consumers’ expectation on the impact of the governmental ruling (i.e. the competition law and fair business environment) in both Hong Kong and the fast developing mainland. More importantly, the past argument and the on-going controversies in Hong Kong are the good reference for the mainland society.
1.1.3 Objectivities of the Study
Our study conduct various interviews and researches among general consumers, individual land holders, stakeholders of traditional local business in Guangzhou and Foshan city, to test the awareness of the Land and the Ruling Class of the general public and propose solutions for the decline traditional local brands. Our solutions are referring to the success of the competition law implementation in Hong Kong and certain consuming behaviors against the Land and the Ruling Class. Our study appeals to amend the legislature and maintain a fair business environment for the traditional local Cantonese brands, under current land sales policy in the mainland.
1.2 Literature Review
1.2.1 Current Anti-unfair Competition Law in Mainland China
Jiang (2007) state that the internal competition law which plays a role in maintaining the freedom and fair competition order of the global world included the anti-unfair competition law and anti-monopoly law. Dene and Dan (2001) considered that China Against Unfair Competition Law take advantage to protect the commercial reputation when of China enter the World Trade Organization. Further, this law has a good impact on Chinese reform.
According to Liu (2008), Chinese Anti-unfair Competition Law was defined to determining what constitutes it. Moreover, it also discusses the confusion that the association should not be covered by the competition law.
However, Li and Ming (2007) considered the comprehensive Chinese Competition Law would create a serious problem because China is a free market competition and wherein the agency are so week that it can not make sure effective competition policy to enforce. Therefore, the author suggested the unjustified competition rules should be modified.
1.2.2 Current Anti-Monopoly Law in main Mainland China
The Chinese Anti-Monopoly Law, which set up a comprehensive framework to regulate the Chinese market economic, was totally passed by the People Congress of the People’s in 2007 (Huang, Jiang, Diana and Randy)(2010). Here are the purposes of this law: Prevent and restrain the monopoly behavior; keep the market in a fair competition environment; enhance economic efficiency; safeguard the interests of consumers and the public interest; promote the healthy development of China's socialist market economy.
Bruce M., Sun and Zheng (2007) present information on the Anti-Monopoly Law (AML) of China which contains four aspects: statement-owned enterprises (SOEs) and other reform measures, antitrust laws, and regulations enacted in the country. Actually, Zhao (2004) reported that the Anti-Monopoly Law (AML) of China was spurred by the success of the Anti-unfair Competition Law. Moreover, the conflict is the transfer progress from a centrally planned economy into a free market economy.
1.2.3 Rental Expenses
Malcolm P. (1931) determined the relationship between the department store operating cost and the rental expense. In addition, he analyzes the future of downtown retail enterprises. In the end, a result was put up that rental cost encroach on the retail store profit.
According to Hui, Yiu and Yau (2007), district centers owned the highest average rental levels and the second highest is the local and estate centers. Moreover, unorganized shops’ rental fees are below the average rental levels.
1.2.4 Competition Law and relevant legislatures in Hong Kong SAR
Before June 2012, there were competition laws only for the broadcasting and telecommunication industries. In particular, the Broadcasting Ordinance stipulates that a licensee cannot form any pricing agreements to prevent or restrict competitors from providing goods or services (Section 7K, Chapter 106 of Hong Kong Law). The Ordinance also prohibits the licensee from any mergers or acquisitions which will dramatically reduce competition. Chapter 106 rules a post merger review control regime down the telecommunication operators, which is said to be controlled by the griant property developers in Hong Kong. The post merger review herein is supplemented by a voluntary pre-notification system, plus a test of “substantially lessening of competition” is adopted by the Hong Kong court. Lau (2011) interpretated that if the merger is found to be anti-competitive, the Hong Kong Telecommunication Authority can order the licensee to eliminate the anti-competitive effect of the merger.
3. Procedures and Methodology
3.1 Person-in-charge
The two authors of the report are our core research team members, with supports from the their networks in various organizations including, but are not exclusively, retailing companies, financial consultants, the Guangzhou En Ning Lu Caring Group and the Canton Public Opinion Research Center. Mr. Michael LI will mainly in charge of questionnaire design and data consolidation, and quality control while Mr. Edward WANG will direct the whole project and be responsible for external communication, online promotions, and interviews and physical visits. Our project is under Mr Berry KWOCK's supervision with monthly discussion and feedbacks.
3.2 The Online Social Network System (SNS) Methods
After the feedback of the proposal herein, an official weibo will be registered in the current most popular operator SINA, and similar accounts to be registered in Renren.com, facebook, and other local forume like c2000. All these SNS accounts will be registered under the name of "老字號 逐個數" and "Our Old Brands" , with key characteristics of Land and the Ruling Class, Cantonese, Property, Competition Law, Old Town, and Retailing etc., posting in both Chinese and English. The theme of "老字號 逐個數" is in rhyme in Cantonese, which is easily and well received by whom are the local people and our study's target audience. In accordance with the authors' work experience, the SNS method herein is a cost effective approach to reach and communicate with whom are our target audience and especially interested in our topics. This approach is also offset against the limited volume of our physically reachable target audience.
3.3 The Physical Methods
Within the networks supporting, physical interviews are still the essential modus operandi in our study in addition to the online promotion. Different interview scripts will be decided for different interviewees. Firstly, the Cantonese brands stakeholders are separated into groups hereunder, royal consumers in the communities (the old towns before new development), the small business operators as the original tenants, the acquirer and acquiree of the land. Secondly, our study aims to consult legal scholars and social campaign participants in both Hong Kong and the mainland, for their points of view of current Competition Laws practices and advices. Finally, taking a look at the Competition Laws legislative procedures are significant to study the possibility to certain development in mainland China, especially the difference approaches between government of Hong Kong SAR and the mainland.
3.4 Anticipated Time Schedule
Critical Date |
Events |
November 28th, 2012 |
Submission of project proposal |
December, 2012 |
Proposal feedback and official research Weibo setup along with other SNS and forum |
Winter Vacancy |
Determined the case research mode with our supervisor
Verified application of the research Weibo
Interviews with legal scholars, social campaign participants, government officers, and Cantonese brands stakeholders |
February 10 th,2013 |
Consolidate results from outdoor interviews and online survey promotion |
February,2013 |
Carried out physical survey and telephone interview with local consumers |
Early March, 2013 |
Final consolidations, and first draft report for English Language Center proofreading |
March 21st, 2013 |
Submission of the first draft report |
Late March, 2013 |
Conduct post-test survey, make up researches, amendment, and thanks to interviewees |
April 16th, 2013 |
Submission of the Final Year Project Report |
Mid-April, 2013 |
Prepare for presentation files |
30 April – 15 May 2013 |
Present the whole findings and outcomes of the project |
4. Reference
Liu, Y. (2008). Confusion or Association? Understanding Chinese Anti-unfair Competition Law. China Law & Practice, 43.
Li, K. X., & Ming, D. (2007). Does China Need Competition Law?. Journal Of Business Law, 182-208.
Owen, B. M., Sun, S., & Zheng, W. (2008). CHINA'S COMPETITION POLICY REFORMS: THE ANTI-MONOPOLY LAW AND BEYOND. Antitrust Law Journal, 75(1), 231-265.
Yong, Z. (2004). Comment: Will protectionists hijack China's competition law?. International Financial Law Review, 23(1), 21.
McNair, M. P. (1931). DEPARTMENT STORE RENTALS I. Harvard Business Review, 9(2), 178.
E.C.M., H., C.Y., Y., & Y., Y. (2007). Retail properties in Hong Kong: a rental analysis. Journal Of Property Investment & Finance, 25(2), 136-146
Yeaman, D., & Ryan, D. (2001). Advertising pitfalls in China. Managing Intellectual Property, (112), 64.
Yong, H., Shan, J., Moss, D., & Stutz, R. (2010). CHINA'S 2007 ANTI-MONOPOLY LAW: COMPETITION AND THE CHINESE PETROLEUM INDUSTRY. Energy Law Journal, 31(2), 337-370.
《中华人民共和国反不正当竞争法》http://www.gov.cn/banshi/2005-08/31/content_68766.htm
广东省实施《中华人民共和国反不正当竞争法》办法
http://www.gdemo.gov.cn/ywwk/fgk/gdsflfg/shaqlfg/shaqsjlgdsfggz/200712/t20071214_37721_3.htm
《中华人民共和国发垄断法》
http://www.gov.cn/flfg/2007-08/30/content_732591.htm
http://web.ebscohost.com/ehost/detail?sid=b45c6c79-c7aa-435e-88ce-bb43daa4ca99%40sessionmgr10&vid=1&hid=9&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=aph&AN=28052367
http://house.people.com.cn/GB/11350637.html 广州政府去年卖地收入增加近九成
Chapter 106, Hong Kong Law
www.consumer.org.hk, Hong Kong consumer council
Sandy LAU, Hong Kong today, competition law, 3 January, 2011, liberal studies, Hong Kong Economic Times