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 active pharmaceutical ingredients (APIs) and that investment and merger activities should be promoted in a lawful and orderly manner.

Strengthening the Foundation of Competition Policy

From the perspective of the market supervision department's functions, Wang noted that efforts must be made to strengthen fair competition reviews and uphold the fundamental role of competition policy. SAMR emphasizes that competition policy should serve as the underlying, basic rule within all economic policy systems. Various industrial, investment, fiscal, and tax policies must 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 to prevent the artificial creation of market barriers.

Enhancing Antitrust Enforcement Efficiency

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

Unifying Market Rules and Ensuring Smooth Resource Flow

Wang Guowei stated that unified market rules and regulations are necessary to ensure the smooth flow of resources and factors. SAMR will accelerate the establishment of unified rules for enterprise establishment, relocation, and deregistration at the market access stage to safeguard business autonomy. In the production and operation stage, it will expedite the improvement of the national standards system to ensure better coordination and alignment of various standards. In the circulation and consumption stage, SAMR will focus on improving regulatory rules for online trading markets to achieve integrated online and offline supervision.

Comprehensive Crackdown on "Involution-Style" Competition

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, and strict penalties will be imposed according to the law. The administration will promote the implementation of the Rules on Price Conduct for Internet Platforms to continuously regulate price competition in the platform economy. It will also study and formulate the Interim Provisions on the Implementation of the Price Supervisor System to reinforce enterprises' primary responsibility for price compliance.

2. Strengthening Quality Supervision

SAMR will further strengthen source management by optimizing the management of industrial product production licenses and dynamically adjusting the compulsory product certification catalog to ensure quality market access. At the same time, 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 random 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. A special campaign will be launched to comprehensively address the quality and safety of 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 also strengthen the protection of trade secrets, explore and introduce local regulations and management norms for trade secret protection based on regional conditions, and actively promote pilot projects and service stations for trade secret protection innovation.

(Source: China Securities Journal)