Beijing introduces a new pricing oversight framework aimed at curbing dumping practices and promoting self-regulation, as authorities respond to growing concerns over deflation and eroding industry margins.
China’s top economic planning and market regulators have unveiled a tiered price supervision mechanism designed to rein in what they describe as “disorderly” price competition across key industries.
The National Development and Reform Commission (NDRC) and the State Administration for Market Regulation (SAMR) jointly announced the move as part of a broader effort to strengthen price discipline while avoiding heavy-handed market controls. Under the new approach, regulators will begin with warnings to businesses suspected of improper pricing.
If businesses fail to comply, regulators may launch cost investigations or price inspections. Companies found in violation will face penalties in accordance with laws.
The strategy combines ex-ante guidance with mid- and post-event regulatory oversight, encouraging voluntary compliance while preserving the ability of authorities to intervene when necessary.
The policy encourages industry associations — under regulatory oversight — to develop cost-based benchmarks to help businesses set “reasonable” prices. These benchmarks are not mandatory, and officials have emphasized that companies will retain full legal autonomy in setting their prices. Importantly, the ban on below-cost pricing refers specifically to a company’s own costs, not industry-wide averages.
The new strategy is designed to improve market transparency, support operational efficiency, and preserve fair competition — particularly in sectors grappling with overcapacity and shrinking profit margins. Authorities underscored that the initiative must align with the country’s Price Law and Anti-Monopoly Law, and warned of consequences under China’s so-called Credit System for non-compliance, including blacklisting and restricted market access.
The rollout aligns with Beijing’s ongoing campaign to restructure its economy and address damaging price wars, which have drawn regulatory scrutiny in sectors such as food delivery and freight logistics.
Against a backdrop of slowing inflation and emerging deflation risks, China is adapting its price regulation tools — originally developed during times of scarcity and inflationary pressure.
Huang Yong, an antitrust advisor to the State Council, highlighted the shift, noting that China’s 1998 Price Law was created in an era of limited supply to prevent “arbitrary price hikes.” Today, as the economy matures and production becomes more abundant, its focus has evolved to guard against “arbitrary price cuts.”
Source: MLex
