Chinese regulators step up efforts to target disorderly price competition

The National Development and Reform Commission (NDRC) – the country’s top economic planner – and the State Administration for Market Regulation (SAMR) published a joint policy paper on Thursday outlining measures designed to limit the intense competition within some industries that has led to price wars and other self-destructive cost-cutting practices.

“Disorderly competition can have negative effects on industry development, product innovation, and quality and safety. It’s detrimental to the healthy development of the national economy,” the statement said.

For key industries where “disorderly price competition is a prominent issue”, the two agencies will guide industry associations to evaluate the average production costs across the sector and help companies set reasonable prices, it said.

Authorities are required to warn businesses if they suspect price wars are taking place and must pay close attention to those who have ignored warnings. When necessary, regulators must intervene and conduct cost investigations and price inspections.

“Any violations of pricing laws or regulations discovered shall be dealt with in accordance with the law,” the statement said.

The NDRC and SAMR have vowed to closely monitor market price competition with other government departments and maintain price order in key sectors.