State Council, Opinions on the Establishment of a Fair Competition Review System in the Course of the Creation of the Market System

2. not excluding, restricting or compelling business operators from other regions from/to invest(ing) or establish(ing) (sub-)branches in the home region;

3. when arranging fiscal expenditures, the same may not in general be linked with the tax and non-tax revenues paid by enterprises; and

4. not illegally disclosing or requiring business operators to disclose sensitive production and operation information, or offering facilitating conditions for business operators to engage in monopolistic acts.

Exceptions:

1. those that safeguard national economic security, cultural security or have a bearing on national defense development;

2. those the objective of which is the realization of social security objectives, such as poverty alleviation and development, and disaster relief; and

3. those the objective of which is realization of the public good, such as conservation of energy resources and protection of the ecological environment.

A Policy Formulation Authority shall explain how the relevant policy measure is indispensable for the realization of the policy objective and will not materially eliminate or restrict market competition, and shall expressly specify the period of implementation.

Commencing from July 2016, State Council departments, provincial-level people's governments and their agencies shall conduct fair competition reviews in the course of the formulation of relevant policy measures. Commencing from 2017, provincial-level people's governments shall gradually launch in their administrative areas and guide city and county-level people's governments and their agencies in conducting fair competition reviews (Article 4).

Related legislation: PRC Anti-monopoly Law

Issued: June 1 2016

Main contents: Administrative authorities and organizations on which the function of administering public affairs are bestowed by laws and regulations (hereinafter collectively referred to as “Policy Formulation Authorities”) that formulate market access, industry development, investment, bid invitation and submission, government procurement, business codes of conduct, qualification standards regulations, rules, regulatory documents and other policy measures that have a bearing on the economic activities of market entities shall conduct fair competition reviews (Article 3).

A review shall be conducted on the basis of four aspects, market access and withdrawal, free flow of goods and elements, effect on production and operating costs and effect on production and operating acts, and a total of 18 criteria. The criteria include the following:

1. not designating the goods and services provided by specific business operators for dealing, purchase and use;

2. not excluding, restricting or compelling business operators from other regions from/to invest(ing) or establish(ing) (sub-)branches in the home region;

3. when arranging fiscal expenditures, the same may not in general be linked with the tax and non-tax revenues paid by enterprises; and

4. not illegally disclosing or requiring business operators to disclose sensitive production and operation information, or offering facilitating conditions for business operators to engage in monopolistic acts.

Exceptions:

1. those that safeguard national economic security, cultural security or have a bearing on national defense development;

2. those the objective of which is the realization of social security objectives, such as poverty alleviation and development, and disaster relief; and

3. those the objective of which is realization of the public good, such as conservation of energy resources and protection of the ecological environment.

A Policy Formulation Authority shall explain how the relevant policy measure is indispensable for the realization of the policy objective and will not materially eliminate or restrict market competition, and shall expressly specify the period of implementation.

Commencing from July 2016, State Council departments, provincial-level people's governments and their agencies shall conduct fair competition reviews in the course of the formulation of relevant policy measures. Commencing from 2017, provincial-level people's governments shall gradually launch in their administrative areas and guide city and county-level people's governments and their agencies in conducting fair competition reviews (Article 4).

Related legislation: PRC Anti-monopoly Law