Fair Competition Review Ordinance

Decree of the State Council of the People's Republic of China
No. 783

The Regulation on Fair Competition Review, which was adopted at the 32nd executive meeting of the State Council on May 11, 2024, is hereby promulgated and shall come into force on August 1, 2024.

Prime Minister Li Qiang.

June 6, 2024.

Fair Competition Review Ordinance

Chapter I General Provisions

Article 1 In order to regulate the review of fair competition, promote fair market competition, optimize the business environment, and build a unified national market, these regulations are formulated in accordance with the the People's Republic of China Anti-Monopoly Law and other laws.
Article 2 To draft laws, administrative regulations, local regulations, rules, normative documents and specific policies and measures (hereinafter collectively referred to as policies and measures) related to the economic activities of business operators, administrative organs and organizations authorized by laws and regulations with the function of managing public affairs (hereinafter collectively referred to as drafting units) shall carry out fair competition review in accordance with the provisions of these regulations.
Article 3 The review of fair competition shall adhere to the leadership of the Communist Party of China and implement the line, principles, policies and decision-making arrangements of the Party and the State.
The state strengthens the examination of fair competition, and ensures that all kinds of operators use production factors equally in accordance with the law and participate in market competition fairly.
Article 4 The State Council shall establish a fair competition review coordination mechanism to coordinate, coordinate and guide the national fair competition review work, study and solve major problems in the fair competition review work, and evaluate the national fair competition review work.
Article 5 Local people's governments at or above the county level shall establish and improve the working mechanism of fair competition review, ensure the strength of fair competition review, and include the funds for fair competition review into the government budget at the corresponding level.
Article 6 The market supervision and administration department of the State Council shall be responsible for guiding the implementation of the fair competition review system and urging relevant departments and localities to carry out fair competition review.
The market supervision and administration departments of the local people's governments at or above the county level shall be responsible for organizing the implementation of the fair competition review system in their respective administrative areas.
Article 7 The people's governments at or above the county level shall incorporate the review of fair competition into the assessment and evaluation content of the construction of a government under the rule of law and the optimization of the business environment.

Chapter II Examination Criteria

Article 8 The policies and measures drafted by the drafting unit shall not contain the following restrictions or disguised restrictions on market access and withdrawal:
(I) the illegal establishment of approval procedures for industries, fields, and businesses other than the negative list of market access;
(II) illegal establishment or grant of franchise;
(III) restrict the operation, purchase or use of commodities or services provided by specific operators (hereinafter collectively referred to as commodities);
(IV) setting unreasonable or discriminatory conditions for entry and exit;
(V) other restrictions or disguised restrictions on market access and withdrawal.
Article 9 The policies and measures drafted by the drafting unit shall not contain the following contents that restrict the free flow of commodities and elements:
(I) restricting the entry of foreign or imported goods and factors into the local market, or hindering the relocation of local operators and the export of goods and factors;
(II) exclude, restrict, compel or in a disguised form compel non-local operators to invest and operate or set up branches in the local area;
(III) excludes, restricts or in a disguised form restricts non-local operators from participating in local government procurement, tendering and bidding;
(IV) the establishment of discriminatory charging items, charging standards, prices or subsidies for foreign or imported goods and essential factors;
(V) setting discriminatory requirements for local investment and operation of foreign operators in terms of qualification standards, supervision and law enforcement;
(VI) other content that restricts the free flow of goods and elements.
Article 10 The policies and measures drafted by the drafting unit shall not contain the following contents that affect the production and operation costs without the basis of laws and administrative regulations or the approval of the State Council:
(I) tax incentives for specific operators;
(II) giving selective and differentiated financial incentives or subsidies to specific operators;
(III) give preferential treatment to specific operators in terms of access to elements, administrative fees, government funds, social insurance premiums, etc;
(IV) other content that affects the cost of production and operation.
Article 11 The policies and measures drafted by the drafting unit shall not contain the following contents that affect the production and operation activities:
(I) force or disguise the operator to carry out monopolistic behavior, or provide convenient conditions for the operator to carry out monopolistic behavior;
(II) go beyond the statutory authority to set government guidance prices, government pricing, for specific operators to provide preferential prices;
(III) illegally intervene in the price levels of commodities and factors subject to market-adjusted prices;
(IV) other content that affects production and business operations.
Article 12 The policies and measures drafted by the drafting unit have or may have the effect of excluding or restricting competition, but they meet one of the following circumstances, and there is no alternative plan with less impact on fair competition, and a reasonable implementation period or termination conditions can be determined., May be introduced:
(I) to safeguard national security and development interests;
(II) to promote scientific and technological progress and enhance national capacity for independent innovation;
(III) for the realization of energy conservation, environmental protection, disaster relief and other social public interests;
Other circumstances as prescribed by (IV) laws and administrative regulations.

Chapter III Review Mechanism

Article 13 For policies and measures to be issued by the department, the drafting unit shall conduct a fair competition review at the drafting stage.
For policies and measures to be jointly issued by multiple departments, the lead drafting unit will conduct a fair competition review at the drafting stage.
Article 14 For policies and measures to be promulgated by the people's government at or above the county level or submitted to the people's congress and its standing committee at the corresponding level for deliberation, the market supervision and administration department of the people's government at the corresponding level shall, in conjunction with the drafting unit, conduct a fair competition review at the drafting stage. The drafting unit shall conduct a preliminary examination and send the draft policies and measures and the preliminary examination opinions to the market supervision and management department for review.
Article 15 The State encourages regions where conditions permit to explore the establishment of cross-regional and cross-sectoral fair competition review mechanisms.
Article 16 To conduct a fair competition review, the opinions of interested parties such as relevant operators, trade associations and chambers of commerce on the impact of fair competition shall be heard. Involving the interests of the public, should listen to the views of the public.
Article 17 A fair competition review shall be conducted in accordance with the review standards stipulated in these Regulations and after assessing the impact on fair competition, a conclusion of the review shall be made.
Where the provisions of Article 12 of these Regulations apply, it shall be stated in detail in the conclusion of the review.
Article 18 Policies and measures shall not be introduced without fair competition review, or if they are found to violate the provisions of Articles 8 to 11 of these regulations and do not conform to the provisions of Article 12 after fair competition review.
Article 19 The relevant departments, units and individuals shall keep confidential the state secrets, trade secrets and personal privacy learned in the process of fair competition examination.

Chapter IV Supervision and Guarantee

Article 20 The market supervision and administration department of the State Council shall strengthen the supervision and guarantee of fair competition review, and establish and improve mechanisms for fair competition review and spot checks, report handling, and supervision.
Article 21 The market supervision and management department shall establish and improve the fair competition review and random inspection mechanism, organize random inspections of relevant policies and measures, and if it is found to violate the provisions of these regulations after verification, it shall urge the drafting unit to make rectification.
The market supervision and administration department shall report the situation of spot checks to the people's government at the corresponding level, and the results of spot checks may be made public to the public.
Article 22 Any unit or individual may report to the market supervision and management department for policies and measures that violate the provisions of these regulations. After receiving the report, the market supervision and management department shall promptly handle it or transfer it to the relevant department for handling.
The market supervision and management department shall disclose to the public the telephone number, mailbox or e-mail address of the report.
Article 23 the State Council shall regularly supervise and inspect the construction of the working mechanism of fair competition review, the development of fair competition review and the handling of reports of local people's governments at or above the county level. The market supervision and management department of the State Council shall be responsible for the specific implementation.
Article 24 if the drafting unit fails to carry out a fair competition review in accordance with the provisions of these regulations, and fails to make rectification within the time limit after being urged by the market supervision and administration department, the market supervision and administration department at the next higher level may interview its responsible person.
Article 25 If the fair competition review is not carried out in accordance with the provisions of these regulations, causing serious adverse effects, the person in charge directly responsible and other directly responsible persons of the drafting unit shall be punished according to law.

Chapter V Supplementary Provisions

Article 26 The market supervision and administration department of the State Council shall, in accordance with these Regulations, formulate specific implementation measures for fair competition review.
Article 27 These Regulations shall enter into force as of August 1, 2024.