After 12 years of discussion, the Anti-Monopoly Law has been brought before the National People's Congress for ratification.

As an important legal instrument for the smooth workings of China's market economy, the law is being hailed as an "Economic Constitution" in local media.

In February 2004, the Ministry of Commerce and State Administration for Industry and Commerce together drafted the law and submitted it to the State Council. Considering the importance of the law, the State Council invited 10 experts and lawmaking departments to discuss it.

After more a year's discussion and amendments, the act was finally place before the National People's Congress on June 24.

Xinhua reports that the draft law, with 56 articles in eight chapters, mainly focuses on banning companies from making monopolistic agreements, abusing their dominant market status, or seeking unreasonable mergers or acquisitions. For example, when seeking mergers or acquisitions, all companies with the exception of financial bodies such as banks and insurance companies, should inform authorities if the total turnover of all parties involved exceeds RMB1.2 billion.

The draft law has two main purposes. First, it limits unfair competition by breaking monopolies to create a good environment for market flow. Second, it offers more opportunity for domestic corporations to improve their competitiveness.