BEIJING, Dec. 8 -- China should introduce an early warning-system to prevent multinational companies (MNCs) from cornering the Chinese market, a cabinet think-tank has suggested.

    Xie Fuzhan, vice-president of the State Council Development Research Centre urged the government to take action as foreign investors have intensified expansion in some industrial sectors and obtained sizeable shares of certain large projects.

    "These are new trends in foreign investment, and they deserve close attention," Xie warned.

    "But it doesn't conflict with our lasting strategy that emphasizes partnerships with MNCs which are willing to transfer core technologies and management experience."

    Facing the new investment trend, Xie suggested that China should establish standards and a system to watch the behaviour of overseas investors to prevent monopoly risks in the Chinese market.

    The system and standards are expected to be line with the Anti-Monopoly Law, which is going to be delivered to the National People's Congress for voting soon.

    Xie voiced his concerns at yesterday's forum on China's Investment Opportunity and Overseas Chinese Entrepreneurs, which was organized by China News Agency.

    In addition to preventing foreign investors from implementing monopolistic practices, China is establishing an anti-monopoly law to create equal market access for all investors, said Lin Yueqin, researcher with Chinese Academy of Social Sciences.

    "The upcoming law will stipulate very clearly that a dominant market position should not be allowed to be abused by any market players, either from home or abroad," said Lin.

    Lin said China will limit mergers and acquisitions and create a report system in which any mergers or acquisitions that meet certain criteria will require approval.

    The criteria will be transparent, meaning enterprises will be held fully responsible for their business activities, said Lin.