Local governments will no longer be allowed to take steps that favor preferred enterprises in their region, as China steps up its efforts to ensure fair market competition for businesses in the country, officials familiar with the matter said on Oct 25.
The nation’s five major regulatory agencies, including the National Development and Reform Commission, China’s top pricing regulator, will issue guidelines on Oct 26 that restrict local governments from taking monopolistic steps or other market intervention measures that benefit some industries or companies, they said.
The guidelines would also urge local government officials to conduct a “self-review” on 50 don’ts before they issue any policies related to economic activities.
The 50 don’ts are developed based on a document issued by the State Council in June last year, which it stipulates a broad negative list of 18 don’ts for local governments apart from the anti-monopoly law.
The guidelines will also spell out definitions and examples for policies that are in violation of the fair market principles, like those that guide enterprises’ price-fixing behaviors and the discriminatory conditions for market entry.
For instance, setting barriers for exports or granting favorable conditions to preferred enterprises through fiscal subsidies will not be allowed, according to the guidelines.
Local officials will also be held accountable if they issue policies that violate fair market principles.
Enterprises can file lawsuits against local governments and report them to anti-monopoly law enforcement authorities if they violate the rules, according to the guidelines.
“The self-review process, which is compulsory, will help reduce the number of government-related cases on monopolistic behavior,” said an official with the Price Supervision Bureau of the NDRC. “Some local governments simply disregard the rules and violate fair market principles.”
