Experts have warned of a possibly worsening business environment as vicious competition is increasing in some industries.

They suggest the country revise its competition laws and strengthen administrative supervision over the market to deal with the trend.

When many companies in one industry produce similar products, unfair competition can develop without sufficient supervision or legal restrictions, said Li Renyu, a law professor at Beijing Technology and Business University.

Recent cases, such as China's dairy giants Mengniu and Yili defaming each other on the Internet as well as IT giants Qihoo 360 and Tencent's ongoing catfight over underhanded business practices, have challenged the country's competition laws, according to Liu Deliang, a cyber-law expert at Beijing University of Posts and Telecommunications.

"Such cases are not yet covered by the laws against unfair competition, and the judicial interpretation lacks adequate elaboration. This has made law enforcement hard to put into practice," said Wang Junlin, a lawyer with Beijing Yingke Law Firm.

Wang suggested a quick revision of the law and a highlighting of intellectual property rights protection.

"Vicious competition will not only hurt enterprises, but also the whole industry and customers," he said.

Industry associations should also set up regulations to mediate disputes caused by unfair competition, he said, adding: "If mediation doesn't work, then companies in the dispute can follow judicial procedures."

(China Daily November 5, 2010)