Translation: NDRC, SAMR's Explanatory Notes on Proposed Amendments to China's Pricing Law
Among other changes, the draft amendments seek to curb price wars.
Welcome to a special issue of NPC Observer Monthly, a (mostly) monthly newsletter about China’s national legislature: the National People’s Congress (NPC) and its Standing Committee (NPCSC).
Before getting to today’s topic, here’s a quick scheduling note: Instead of separate recaps for June and July, I’ll publish a combined double issue. I’m still writing up one of the main developments from June, while also working on various other writing projects—some of which I hope to share with you soon—and preparing for the fall semester. Thank you for your patience!
Now, back to the special issue. —Changhao
Today (July 24, 2025), China’s National Development and Reform Commission and State Administration for Market Regulation released draft amendments to the Pricing Law [价格法] for public comment through August 23. They also published an accompanying explanation that briefly describes the rationales for and the general approach to amending the Law, the drafting process, and its key provisions. (Xinhua also published a Q&A with responsible officials from the two agencies that is basically a shorter version of the explanation.)
Although updating the Pricing Law is a lower-priority (Category II) project in the current NPCSC’s five-year legislative plan, it was not listed in the NPCSC’s or the State Council’s 2025 legislative plan. We thus suspect it has since been prioritized, especially given the central leadership’s recent call to “eliminate disorderly low-price competition.” Indeed, the explanation specifically notes that the two agencies opted for an “amendment” [修正案]—rather than a comprehensive “revision” [修订]—to focus on “provisions that urgently need to be updated and improved and that enjoy broad consensus among all parties.”1
Given the potential interest in this legislation, we’ve decided to post an edited machine translation of (excerpts from) the explanation and of the provision defining “unfair pricing practices,” a core focus of the amendments. We have also prepared a comparison chart (in Chinese) for the draft amendments. (In case you aren’t aware, we track every draft law that a State Council agency has put out for public comment.)
It is probable that the State Council will finalize the draft and submit it to the NPCSC for review within the year.
Drafting Explanation for the Draft Amendment to the PRC Pricing Law (Draft for the Solicitation of Comment)
[Introduction omitted.]
I. Necessity of the Revision
Since it took effect in 1998, the Pricing Law has played an important role in guiding the optimal allocation of resources, promoting the reasonable movement of prices, and protecting the lawful rights and interests of consumers and business operators. With economic and social development and the deepening of price reform, certain provisions of the Pricing Law need to be updated and improved.
First, the need to adapt to new situation and new changes. The situation currently facing pricing work has undergone significant changes. The prices of the vast majority of goods and services are now formed by the market, new economies, business forms, and models continue to emerge, and disorderly low-price competition in some industries has become prominent, placing new demands on price control and regulation.
Second, the need to improve the level of law-based price governance. In recent years, the meaning, methods, and means of pricing work have changed, so consistent with the requirements of law-based administration, it is necessary to refine, in statutory form, the responsibilities and work procedures for price management. And, with the growth of the internet, the government has more channels to solicit opinions, so it is necessary to diversify such channels to better promote public participation and make government pricing sounder and more standardized.
Third, the need to consolidate the practical experience of price reform. As pricing reform deepens, government pricing mechanisms continue to improve, and a relatively sound system of pricing and cost supervision and review [成本监审] has been established; and certain items have shifted from setting specific price levels to formulating pricing mechanisms, allowing prices to reflect the changes in market supply and demand more flexibly. The outcomes of the relevant reforms need to be consolidated through statutory amendments, so as to achieve an organic alignment between legislation and reform.
II. Revision Process. . . .
III. Overall Approach to the Revision
The revision of the Pricing Law follows these principles: First, remain oriented toward serving the overall situation. Guided by the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, [we have] adhered to the direction of reform toward a socialist market economy and provided legal safeguards for deepening pricing reform, strengthening the capacity of price control, and improving the level of price regulation, so as to better serve overall economic and social development.
Second, maintain a problem-oriented approach. In response to the problems that pricing work faces in practice, [we] have focused on key provisions of the Law that no longer meet the new circumstances, new tasks, and new requirements, improved the [relevant] statutory provisions, and strengthened the Law’s applicability and effectiveness.
Third, pursue progress while maintaining stability. On the premise of maintaining the overall stability of the current statutory framework, [we] have advanced the changes in the form of an amendment to build the broadest possible consensus.
IV. Main Contents of the Revision
The Draft Amendment contains 10 articles and mainly covers three aspects:
(1) Improving relevant provisions on government pricing. (1) In light of changes in the methods for managing government pricing, [the draft] clarifies that government-guided prices [政府指导价] are not limited to the form of benchmark prices and their floating ranges [art. 3 as would be amended]. (2) Given the shift in government pricing from setting specific price levels to establishing pricing mechanisms, [the draft] clarifies that pricing authorities may carry out government pricing by formulating pricing mechanisms [art. 21]. (3) Based on recent practice, [the draft] explicitly designates cost supervision and review as an important procedure in government pricing, and further strengthens oversight of the costs used in pricing [arts. 22, 34]. (4) With the development of the internet, the ways in which government solicits opinions have become more diverse, so [the draft] adds new methods for soliciting opinions such as seeking public comment and conducting surveys [art. 23].
(2) Further clarifying the criteria for determining unfair pricing practices [art. 14]. (1) [The draft] improves the criteria for determining low-cost predatory pricing [低价倾销] to regulate the market price order and address “involution-style” competition. (2) [The draft] improves the criteria for determining other unfair pricing practices such as collusive pricing, price gouging, and price discrimination. (3) [The draft] prohibits public utilities, industry associations, and other entities from using their influence or dominant industry positions to force or bundle the sale of goods or the provision of services for payment. (4) [The draft] strengthens the regulation of the pricing practices of the operators of business premises.
[Article 14 is translated below in full, with the proposed changes marked (additions in bold, deletions struck through). Under Article 40, a violation of Article 14 will lead to an order to make corrections, the forfeiture of unlawful gains, and an optional fine of up to five times the unlawful gains. A serious violation will also lead to business suspension or the revocation of business license.]
Article 14: Business operators must not engage in the following unfair pricing practices:
(1) colluding with each other to manipulate market prices
, thereby harming the lawful rights and interests of other business operators or consumers;(2) except for lawfully reducing prices to dispose of perishable goods, seasonal goods, or overstocked goods, or when there are legitimate reasons to reduce service prices, engaging in below-cost predatory pricing to squeeze out competitors or monopolize the market, or forcing other business operators to engage in below-cost predatory pricing according to their pricing rules
, thereby disrupting the normal order of business operations and harming state interests or the lawful rights and interests of other business operators;(3) driving up the prices of goods or services
or pushing the prices of goods to rise excessivelyby means such as fabricating and spreading information about price increases, cornering the market, or, without legitimate reasons, substantially increasing prices far beyond costs;(4) using false or misleading pricing methods to induce consumers or other business operators to trade with them;
(5) providing the same goods or services but practicing price discrimination against consumers or other business operators with the same trading conditions;
(6) using methods such as raising or lowering product grades, splitting service items, or reducing service content to purchase or sell goods or provide services, thereby covertly raising or lowering prices;
(7) gaining exorbitant profits in violation of laws or regulations;
(8) using influence, dominant industry positions, or similar means to force or bundle the sale of goods or the provision of services for payment;
(9) charging unreasonable fees to business operators within business premises, or imposing unreasonable restrictions on, or attaching unreasonable conditions to, their transaction prices;
(10) other unfair pricing practices prohibited by laws and administrative regulations.
Business operators must not use data and algorithms, technologies, or rules to engage in the unfair pricing practices prescribed in the previous paragraph.
(3) Improving legal liabilities for pricing violations. (1) [The draft] adjusts the penalty provisions for business operators’ unfair pricing practices and increases the penalties for business operators who violate the rules on clearly marking prices [art. 42]. (2) [The draft] specifies the legal liability for business operators who refuse to provide or who provide false materials required for cost supervision and review or investigations [art. 44].
In addition, [the draft] has made a few minor textual adjustments.
Thank you for reading! The double issue for June and July will hopefully drop soon.
The explanation repeatedly refers to the draft, however, as a “revision” (mostly in headings), which makes us wonder if the two agencies were preparing an extensive overhaul of the Law before switching to a more limited amendment so that it could be passed sooner.