China's Market Regulator: Fair Competition Review System Established, Antitrust Enforcement to Focus on APIs, Platform Economy

Beijing, September 20 — At a press conference held by the State Council Information Office, Shu Wei, spokesperson and deputy director of the State Administration for Market Regulation (SAMR), announced that the administration is comprehensively employing tools such as price enforcement, quality supervision, and standard-setting to effectively combat malicious low pricing and disorderly competition.

Fair Competition Review System Established

Wang Guowei, director of the Planning and Finance Department of SAMR, stated that the administration has established a fair competition review system. He emphasized that antitrust enforcement should be more focused on areas such as active pharmaceutical ingredients, and that investment and merger activities should be promoted in a lawful and orderly manner.

Wang noted that, from the perspective of the market supervision function, building a unified national market requires strengthening fair competition reviews and maintaining the foundational role of competition policy. SAMR stresses that competition policy must serve as the underlying, basic rule within all economic policy systems. Various industrial, investment, fiscal, and tax policies must all be premised on maintaining fair competition. Any policy measures involving the economic activities of business operators must be assessed for their impact on fair competition, in order to prevent the artificial creation of market barriers.

At the same time, the administration will continuously improve the quality and efficiency of antitrust enforcement, resolutely eliminating local protectionism and market fragmentation. It will regularly issue risk alerts regarding improper interventions in market competition and intensify enforcement against acts of administrative power that exclude or restrict competition. The administration will also enhance its capacity and efficiency in reviewing business concentrations, promoting lawful and orderly investment and mergers. With antitrust enforcement already strong and intensive, SAMR will place greater emphasis on monitoring and early warning of monopoly risks, taking measures such as compliance guidance, administrative guidance, and warning interviews to effectively prevent monopolistic behavior before it occurs.

Unifying Market Rules and Curbing "Involution-Style" Competition

Wang Guowei stated that the administration will unify market system rules to ensure the smooth flow of resources and factors. In the area of market access, SAMR will accelerate the establishment of unified rules for enterprise establishment, relocation, and deregistration, safeguarding business autonomy. In production and operations, it will speed up the improvement of the national standards system to ensure better coordination among various standards. In circulation and consumption, SAMR will focus on improving regulatory rules for online trading markets, achieving integrated online and offline governance.

Three Key Areas for the "15th Five-Year Plan" Period

Shu Wei stated that during the "15th Five-Year Plan" period, SAMR will focus on the following three areas to accelerate the shift of market competition from "competing on price" to "competing on quality":

1. Strengthening Price Enforcement

• SAMR will accelerate the revision of the Price Law and study amendments to the Provisions on Curbing Low-Price Dumping.
• For enterprises that initiate malicious low-price competition and disrupt production and operation order, cost investigations and price inspections will be conducted, with strict penalties imposed according to law.
• The Rules on Price Conduct for Internet Platforms will be implemented to continuously regulate price competition in the platform economy.
• The Interim Provisions on the Implementation of a Price Supervisor System will be formulated to reinforce enterprises' primary responsibility for price compliance.

2. Strengthening Quality Supervision

• SAMR will further strengthen source management, optimize the management of industrial product production licenses, and dynamically adjust the compulsory product certification catalog to ensure quality access.
• It will enhance quality risk monitoring and random inspections, increasing the frequency of checks on products with abnormally low prices, high safety risks, or historically low pass rates. The proportion of inspections in key areas such as e-commerce platforms and wholesale markets will be raised.
• SAMR will improve the consistency of online and offline supervision and accelerate the establishment of a unified national product quality and safety traceability system. It will also reinforce the primary responsibilities of platform enterprises in verifying product information and cooperating with recalls.
• Special campaigns will be launched to address quality and safety issues in industrial products sold online, with strict crackdowns on illegal and non-compliant online product sales.

3. Strengthening Anti-Unfair Competition Enforcement

• SAMR will thoroughly implement the newly revised Anti-Unfair Competition Law and continuously improve supporting regulatory rules.
• It will regularly deploy special enforcement actions against unfair competition, focusing on key issues such as false advertising, mutual defamation, commercial slander, and commercial bribery, and will investigate and penalize a number of typical cases.
• The administration will strengthen the protection of trade secrets, explore and introduce local regulations and management norms for trade secret protection, and actively promote pilot projects and service stations for trade secret protection innovation.

(Source: China Securities Journal)