China: NDRC's Probe Of The Foreign Finance Sector May Signal Increased Antitrust Enforcement Risks Related To SSA Market And Beyond

Last Updated: 4 July 2017
Article by Mimi Yang and Kaede Toh

Most Popular Article in China, July 2017

Recent press reports in China have indicated that China's National Development and Reform Commission (NDRC), one of China's three antitrust regulators,1 is launching an inquiry into firms in the foreign finance sector to determine if they have engaged in price fixing. While the NDRC has not released any public information regarding the probe, local sources note that it is likely to be in its early stages and related to possible manipulation in the trading of so-called supranational, sub-sovereign and agency (SSA) bonds.

SSA Bonds

SSA bonds are issued by sovereigns, supranational institutions such as the World Bank or the Asian Development Bank, and agency borrowers such as government-backed policy banks. The size of the SSA market is substantial, reportedly exceeding US$9 trillion. Because of the state-backed nature of the SSA bonds, they often carry benchmark effects on other debt instruments.

In December 2015 and February 2016, the U.S. Department of Justice (DOJ), the U.K. Financial Conduct Authority (FCA) and the European Commission respectively launched investigations into four traders of SSA bonds for possible manipulation of bond prices. The investigations are still ongoing and have reportedly escalated in the past months as the U.S. and U.K. authorities have sought to interview the implicated traders. In prior investigations into the rigging of the London Interbank Offered Rate (LIBOR), a major benchmark interest rate, the U.S. and U.K. authorities secured more than US$9 billion in fines. The DOJ and FCA's current probes, however, are reportedly not targeting institutional wrongdoing but focus on the small group of four SSA bond traders, who worked at different multinational banks and may have shared information and agreed on prices in online chatrooms.

In China, multinational banks may also witness an increased interest from the local antitrust regulators in the trading of SSA bonds. Starting in 2017, China's state-owned banks have participated in the SSA market much more actively in order to support China's primary diplomatic initiative, "One Belt, One Road" (OBOR). In the past four months, Bank of China and two of the three major policy banks in China, China Development Bank (CDB) and the Export-Import Bank of China (Exim Bank of China), each raised billions of dollars in offshore SSA markets to fund projects under the OBOR initiative.2

NDRC Enforcement in the Financial Sector

In recent years, the NDRC has led headline-grabbing antitrust enforcement actions against foreign companies and their joint ventures in China and imposed significant fines,3 and it has long hinted that the finance sector is on its enforcement radar. As early as August 2013, the NDRC announced that its next areas of enforcement would be the automotive, telecommunications, banking, and petroleum industries.4 And in both 2016 and 2017, the NDRC named the finance sector among its top antitrust enforcement priorities.5

While no enforcement actions have yet been announced publicly, that may not be for lack of interest on the part of the NDRC. Instead, the answer may lie in the fact that the Chinese government has only recently begun implementing interest rate marketization. In an August 2013 interview, the Director General of the Price Supervision and Anti-monopoly Bureau explained that any antitrust enforcement action of price-fixing would depend on such marketization. Given the Chinese State Council's recent guiding opinion to the NDRC underlining the marketization of interest rates/currency exchange rates as a key task in 2017, the moment for marketization of rates in the domestic market—and the long-promised enforcement in the financial sector—seems likely to have arrived.6

For a number of years, antitrust regulators at the NDRC have been following the investigations carried out by its foreign counterparts against multinational banks. In the meantime, the NDRC regulators have been making efforts to facilitate closer cooperative relationships with antitrust authorities in jurisdictions like the U.S., EU and U.K. In order to promote communication and cooperation, the NDRC signed antitrust memorandums of understanding (MOUs) with the U.K. Office of Fair Trading (OFT, the predecessor agency of the FCA) in January 2011, with the DOJ and U.S. Federal Trade Commission (FTC) in July 2011, and with the EU Directorate-General for Competition (DG COMP) in September 2012. In April 2016, to exchange information and views on antitrust developments and priorities, high-level officials from the NDRC and the other two Chinese antitrust enforcement agencies traveled to Washington, D.C., and participated in a two-day-long bilateral meeting with officials from the DOJ's Antitrust Division and the FTC. This was the third high-level bilateral meeting since the signing of the MOU. More recently, on March 22, 2017, the NDRC and the EU DG COMP co-hosted the 14th EU-China Competition Week in Beijing. Via these channels, the NDRC appears positioned to be well informed about the global enforcement actions related to various financial instruments, including SSA bonds.

If the NDRC determines that any manipulation has an impact on the Chinese market or on the offshore market conditions under which Chinese banks issue bonds, it is very likely to fold the identified manipulation into ongoing or potential probes of multinational banks.

Ropes & Gray's litigators were actively involved in global criminal investigations of alleged collusion among multinational banks in the setting of LIBOR and other benchmark interest rates, and alleged manipulation of FX-related products, and are closely monitoring developments in SSA-related investigations.


1. The other two antitrust regulators are the Ministry of Commerce (MOFCOM) and the State Administration of Industry and Commerce (SAIC). 

2. iMarkets, Bank of China issued bonds to raise US$3B for "One Belt, One Road," April 14, 2017, Phoenix Finance. See China Development Bank, "CDB Hong Kong successfully issued US$3B bonds denominated in both USD and HKY in the international market," CDB News Center, February 2017. Also see The Export-Import Bank of China, "Exim Bank of China successfully issued bonds denominated in both USD and EUR overseas," March 8, 2017, Exim Bank of China News.

3. Many of the enforcement actions implicated price-fixing issues by foreign automobile makers, including SAIC General Motors (2016; fined US$29 million); Daimler AG's Mercedes-Benz (2015; fined US$57 million); FAW-Volkswagen Sales Co. (2014; fined US$40.5 million); and Chrysler (2014; fined US$5.2 million).

4. BBC News, China's NDRC will expand its scope of investigation, Aug. 15, 2015, BBC China.

5. The Price Supervision and Anti-monopoly Bureau, 2016 Price Supervision and Anti-monopoly Work Priorities, Feb. 2016. 2017 Price Supervision and Anti-monopoly Work Priorities, Mar. 2017.

6. See Notice regarding the opinion on the priorities of deepened economic reforms in 2017, approved by the State Council and transferred to the National Development and Reform Commission, Apr.13, 2017.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.