Regulations on Fair Competition Review

Regulations on Fair Competition Review

 

Chapter 1 General Provisions

Article 1 　To standardize the work of fair competition review, promote fair competition in the market, optimize the business environment, and build a nationwide unified large market, these Regulations are formulated in accordance with the Anti-Monopoly Law of the People’s Republic of China and other relevant laws.

Article 2 　When drafting laws, administrative regulations, local regulations, rules, normative documents, and specific policy measures (hereinafter collectively referred to as “policy measures”) that involve the economic activities of business operators, administrative agencies and organizations authorized by laws and regulations to perform public administration functions (hereinafter collectively referred to as “drafting entities”) shall conduct fair competition reviews in accordance with the provisions of this Regulation.

Article 3 　The work of fair competition review adheres to the leadership of the Communist Party of China and implements the Party and the state’s guidelines, policies, and strategic decisions.

The state is strengthening its efforts to conduct fair competition reviews, ensuring that all types of operators can equally access production factors and fairly participate in market competition in accordance with the law.

Article 4 　The State Council has established a coordination mechanism for fair competition review to comprehensively plan, coordinate, and guide fair competition review efforts nationwide; study and resolve major issues arising in the course of fair competition review; and assess the overall status of fair competition review activities across the country.

Article 5 　Local people's governments at or above the county level shall establish and improve mechanisms for fair competition review, ensure adequate staffing for fair competition review work, and include funding for fair competition review in their respective government budgets.

Article 6 　The market supervision and administration department of the State Council is responsible for guiding the implementation of the fair competition review system and for urging relevant departments and local authorities to carry out fair competition review work.

 

The market supervision and administration departments of local people's governments at or above the county level are responsible for organizing and implementing the fair competition review system within their administrative jurisdictions.

Article 7 　People's governments at or above the county level will incorporate the status of fair competition review into their assessment and evaluation criteria for building a government based on the rule of law and optimizing the business environment.

Chapter 2: Review Standards

Article 8 　Policy measures drafted by the drafting entity shall not contain any provisions that restrict or indirectly restrict market entry and exit.

(1) Illegally imposing approval procedures on industries, sectors, businesses, and other areas not included in the negative list for market access;

(2) Illegally establishing or granting franchise rights;

(3) Restricting the operation, purchase, or use of goods (hereinafter collectively referred to as “goods”) provided by specific operators;

(4) Setting unreasonable or discriminatory entry and exit conditions;

(5) Other provisions that restrict or indirectly restrict market entry and exit.

Article 9 　Policy measures drafted by the drafting entity shall not contain any provisions that restrict the free flow of goods and factors.

(1) Restricting the entry of goods and factors from other regions or imported goods into the local market, or obstructing local operators from relocating out of the region and exporting goods and factors;

(2) Excluding, restricting, compelling, or disguisedly compelling operators from other regions to invest, operate, or establish branches locally;

(3) Excluding, restricting, or indirectly restricting out-of-town operators from participating in local government procurement and bidding activities;

(4) Imposing discriminatory charges, charge standards, prices, or subsidies on goods or factors originating from other regions or imported goods;

(5) Imposing discriminatory requirements on out-of-town operators investing and operating locally in terms of qualification standards, regulatory enforcement, and other aspects.

(6) Other provisions restricting the free flow of goods and factors of production.

Article 10 　Policy measures drafted by the drafting agency, unless based on laws or administrative regulations or approved by the State Council, shall not contain any provisions that affect production and operating costs.

(1) Granting tax incentives to specific operators;

(2) Providing selective and differentiated financial rewards or subsidies to specific operators;

(3) Granting specific operators preferential treatment in areas such as access to production factors, administrative and public service charges, government funds, and social insurance contributions;

(4) Other factors affecting production and operating costs.

Article 11 　Policy measures drafted by the drafting entity shall not contain any provisions that affect production and business operations:

(1) Compelling or disguisedly compelling operators to engage in monopolistic practices, or providing facilitating conditions for operators to engage in monopolistic practices;

(2) Setting government-guided prices or government-set prices beyond the scope of statutory authority, and offering preferential prices to specific operators;

(3) Illegally interfering with the price levels of goods and factors subject to market-regulated pricing;

(4) Other content that affects production and business operations.

Article 12 　Policy measures drafted by the drafting agency, which have or may have the effect of excluding or restricting competition, but meet one of the following conditions, have no alternative solutions that would have a lesser impact on fair competition, and can specify a reasonable implementation period or termination conditions, may be promulgated:

(1) To safeguard national security and development interests;

(2) To promote scientific and technological progress and enhance the nation’s independent innovation capabilities;

(3) To achieve social public interests such as energy conservation, environmental protection, disaster relief, and assistance;

(4) Other circumstances prescribed by laws and administrative regulations.

Chapter 3: Review Mechanism

Article 13 　Policy measures proposed by the department shall undergo a fair competition review conducted by the drafting unit during the drafting stage.

Policy measures planned for joint issuance by multiple departments shall undergo a fair competition review conducted by the leading drafting agency during the drafting stage.

Article 14 　Policy measures proposed by the people's governments at or above the county level, or those submitted to the people's congress at the same level and its Standing Committee for deliberation, shall undergo a fair competition review during the drafting stage, conducted jointly by the market supervision and administration department of the local people's government and the drafting agency. The drafting agency shall carry out a preliminary review and submit both the draft policy measures and the preliminary review opinions to the market supervision and administration department for review.

Article 15 　The state encourages regions with suitable conditions to explore establishing mechanisms for fair competition review that span across regions and departments.

Article 16 　When conducting fair competition reviews, it is necessary to solicit opinions from stakeholders—including relevant business operators, industry associations, and chambers of commerce—regarding the impact on fair competition. If the review involves matters of public interest, opinions from the general public should also be sought.

Article 17 　When conducting fair competition reviews, the review conclusions shall be drawn after assessing the impact on fair competition in accordance with the review standards stipulated in these Regulations.

 

Where the provisions of Article 12 of these Regulations apply, such circumstances shall be described in detail in the review conclusion.

Article 18 　Policy measures shall not be promulgated unless they have undergone a fair competition review, or—having undergone such a review—are found to violate the provisions of Articles 8 through 11 of these Regulations and do not fall under the circumstances specified in Article 12.

Article 19 　Relevant departments, organizations, and individuals shall, in accordance with the law, keep confidential any state secrets, commercial secrets, and personal privacy they become aware of during the fair competition review process.

Chapter Four: Supervision and Guarantee

 

Article 20 　The market supervision and administration department of the State Council has strengthened oversight and guarantees for fair competition review work, and has established and improved mechanisms for random checks on fair competition reviews, handling of complaints, and supervisory inspections.

Article 21 　The market supervision and administration authorities shall establish and improve a random inspection mechanism for fair competition reviews, organize random checks on relevant policy measures, and, upon verification, if any violation of the provisions of this regulation is found, shall urge the drafting agencies to make rectifications.

The market supervision and administration authorities shall report the results of random inspections to the people's government at the same level, and the results of these inspections may be made public to the public.

Article 22 　Any organization or individual may report to the market supervision and administration department any policy measures that violate the provisions of this regulation. Upon receiving a report, the market supervision and administration department shall promptly handle it or forward it to the relevant authorities for processing.

The market supervision and administration authorities shall publicly disclose to the public the telephone number, mailbox, or email address for receiving reports.

 

Article 23 　The State Council regularly conducts supervision and inspection on the establishment of mechanisms for fair competition review by local people's governments at or above the county level, the implementation of fair competition review work, and the handling of complaints. The market regulatory authority under the State Council is responsible for the specific implementation.

Article 24 　If the drafting unit fails to conduct a fair competition review as required by these Regulations and, after being urged by the market supervision and administration department, still fails to make rectifications within the prescribed time limit, the higher-level market supervision and administration department may hold a talk with its responsible person.

Article 25 　If a fair competition review is not conducted in accordance with the provisions of this regulation, resulting in serious adverse effects, the directly responsible supervisors and other persons directly accountable within the drafting unit shall be disciplined according to law.

Chapter V Supplementary Provisions

Article 26 　The market supervision and administration department of the State Council shall formulate specific implementation measures for fair competition review in accordance with these Regulations.

Article 27 　This regulation shall take effect from... Effective August 1, 2024.