Question: What are the key amendments proposed in the draft revision of the Price Law?

Answer: On 4 July 2025, the National Development and Reform Commission and the State Administration for Market Regulation officially published the Draft Amendments to the Price Law of the People’s Republic of China (for Public Comment), initiating a public consultation process. The revisions focus on addressing emerging challenges in market development, introducing significant adjustments across all aspects, from government pricing mechanisms and market price regulations to liability for illegal conduct.

Regarding government pricing, the draft amendments introduce notable changes. First, the forms of government-guided pricing are no longer limited to benchmark prices and floating ranges. Pricing authorities may now determine government pricing levels through mechanisms such as pricing methodologies or rules, etc. This shift signifies a move away from direct price-setting toward indirect price control via scientifically grounded mechanisms, enabling greater flexibility in responding to changes in market supply and demand. For instance, in certain public utility sectors, pricing mechanisms tailored to industry-specific characteristics may be established, taking into account cost audits and market supply and demand conditions. This approach balances operational costs for enterprises and public affordability, thereby promoting efficient resource allocation.

The draft also reinforces cost audits as a critical component of government pricing, ensuring scientific rigour. During the information-gathering phase, new methods, such as public consultations and surveys, have been added to diversify channels for soliciting feedback, significantly enhancing the transparency and normative standards of government pricing.

The amendments further refine the criteria for identifying unfair pricing practices, particularly to address "involutionary" competition (excessive internal competition leading to market distortion). For example, the draft clarifies the standards for dumping, expanding its scope from "goods" to "goods or services." Key determinative factors now include whether prices are set below cost or aim to exclude competitors or monopolise the market. Emerging service industries, where some firms engage in below-cost pricing to attract customers and eliminate competition, will face stricter regulation.

Other unfair practices, such as price cartels, predatory pricing, and price discrimination, are subject to more granular criteria. For example, public enterprises and industry associations are prohibited from leveraging their influence to enforce tied sales, bundled sales, or unjustified service fees. The draft also tightens regulations on pricing conduct by business operators, explicitly banning the use of data, algorithms, or technology to manipulate prices. These measures address new challenges in price supervision within the digital economy.

Regarding legal liability for price violations, the draft introduces stricter penalties. Fines for labelling violations have been increased, substantially raising the cost of non-compliance. Additionally, it clarified the legal consequences that the operators refusing to provide cost audit data or submitting false reports they will face to, strengthening enforcement deterrence and ensuring effective implementation of the Price Law.

This draft amendment represents a comprehensive overhaul of China’s price governance framework, grounded in market realities. Given its potential impact on corporate price management, we advise enterprises to monitor these developments closely.