The WSJ reports,"China is flexing its growing power over global deals, after it put the kibosh on a shipping alliance that officials here said would hold too much sway over trade lanes to Europe.
Tuesday's decision by China's Ministry of Commerce came despite approvals for the shipping alliance in Europe and the U.S. It marks only the second time the Chinese regulator has stepped in to block a corporate combination since the country enacted its antitrust law in 2008".
In a statement on its website posted late Tuesday local time, the Commerce Ministry said it believed the proposed P3 alliance that would have included AP Møller-Mærsk A/S's Maersk Line, CMA CGM SA and Mediterranean Shipping Co. would control about 47% of the Asia-to-Europe container-shipping market. The parties, it said, "failed to demonstrate that the alliance would bring more benefit than harm or that it is in line with the public interest."
Ministry officials couldn't be reached late Tuesday.
China's ambition to have greater say in global pricing trends is one factor behind its increasingly expansive use of its antitrust laws. China is the world's largest trading nation in terms of imports and exports, making it a major customer for big shipping lines. It is the world's largest importer of copper, soybeans and iron ore, and it is challenging the U.S. as the world's largest importer of oil.
Chinese officials hadn't previously expressed any skepticism over the shipping deal, and industry officials widely expected Beijing to follow Washington and Brussels in approving it.
A person familiar with the matter said China COSCO Holdings Co. and China Shipping Container Lines, two of China' biggest shipping companies, opposed the deal because of worry they would lose market share.
Both companies said on Tuesday they weren't involved in the Commerce Ministry's decision.
Zhang Shouguo, executive vice chairman of the China Shipowners' Association, which represents China's major shipping operators, said on Tuesday that the group had expressed concerns about the P3 alliance, which would have given "the world's top three container shipping operators a dominant position" in some of the world's major trade lanes.
Pricing can be a charged issue in China, which has sometimes seen bouts of steep inflation.
"Most other major economies rely much more broadly on the market mechanism for setting prices and allocating resources efficiently," said H. Stephen Harris Jr. , partner at Winston & Strawn LLP. China is moving toward market pricing but "they are doing it in lurches," he said.
Last year Beijing approved the $62 billion deal to combine mining companies Glencore and Xstrata only after Glencore agreed to divest a giant copper mine in Peru. The combined company this year agreed to sell it to a Chinese consortium for $5.8 billion. It also agreed to sell copper concentrate to Chinese customers at specified prices.
China's approach also reflects fundamental differences in its economy versus those in the U.S. and Europe, said Fay Zhou, a Beijing-based partner at law firm Linklaters LLP who formerly worked at the Commerce Ministry, or Mofcom. As well as a massive consumer, China is a major manufacturing and export hub, giving those industries and related government agencies added heft in antitrust discussions.
"China is a large market. It's natural that China may have different interests than other jurisdictions," Ms. Zhou said.
She added, "Mofcom is particularly sensitive to the opinions of the Chinese stakeholder."
That leads to extra scrutiny in fields like mobile devices, in which China is both a major manufacturer for many global players as well as home to a number of ambitious companies that sell their own brands.
