DANIEL ARTHUR LAPRES
Avocat ˆ la Cour dÕAppel de Paris
Barrister and Solicitor Nova Scotia Canada
29 boulevard Raspail 75007 Paris France
Tel: 0145046252 Fax:0145446445/0142228016
Adopted at the 29th Meeting of the Standing Committee of the Eighth National People's Congress and implementated as of May 1, 1998.
This law is formulated with a view to standardizing price behavior so as to strengthen their role in rational disposition of resources, stabilize the general price level of the market, protect the lawful rights and interests of consumers and business operators and then promote the healthy development of the socialist market economy.
The law is applicable to all the price behaviors that occur within the territory of the People's Republic of China.
The term "price" used in the law includes prices of all kinds of merchandise and prices of all kinds of services.
The term "price of merchandise" refers to the prices of all kinds of tangible and non-tangible assets.
The term "price of services" refers to fees collected for services rendered.
The State shall introduce and gradually improve the mechanism of regulation of prices mainly through market force and under a kind of macroeconomic control. Under such a mechanism, pricing should be made to accord with the value law with most of the merchandises and services to adopt market regulated prices while only a few of them to be put under government-set or guided prices.
Market-regulated prices refer to prices fixed independently by business operators through market competition.
"Business operator" used in this law refers to legal persons, other organizations or individuals that engage in production or marketing of merchandises or provide paid services.
Government-guided prices refer to prices as fixed by business operators according to benchmark prices and range of the prices as set by the government department in charge of price or other related departments within their term of reference.
Government-set prices as fixed by the government department in charge of prices or related departments within their term of reference according to the provisions of this law.
The State shall support and prompt fair, open and legal market competition, maintain normal price order and exercise administration, regulation and necessary control over conduct of prices.
The State Council department in charge of prices shall be responsible for the administration of the work related to prices in the whole country and other related departments shall be responsible for such work within their terms of reference.
Price departments of the people's governments at and above the county level shall be responsible for the work related to prices within the regions under their jurisdiction. Price departments of the people's governments at and above the county level shall be responsible for the work related to prices within their terms of reference.
Prices of all merchandises and services, except those as set in Article 18 of this law to adopt government-set or guided prices, shall be subject to market regulation to be fixed by business operators independently according to the provisions of this law.
In fixing prices, business operators should follow the principle of fairness, lawfulness, honesty and trustworthiness.
Prices should be fixed by business operators basing on the cost of production or operation and market supply and demand.
Business operators should strive for a better management to their own production and business operations so as to lower cost and provide consumers with merchandises and services at reasonable prices while obtaining lawful profits in market competition.
Business operators should establish and improve their system of internal price management, accurately record and verify the cost of production or operations for their merchandise or services, in which any deception or forgery is not allowed.
Operators shall enjoy the following rights in pricing:
1. To fix prices that are subject to market regulation;
2. To fix prices within the guided range as set by the government;
3. To fix prices for new products which are subject to government-set or guided prices, except special products for trial sales; and
4. To report or claim against actions that have infringe upon their rights of independent pricing.
In their work related to prices, business operators should strictly keep up with laws, regulations, government guided-prices, government-set prices, legal price intervention measures and emergency measures adopted by the government according to law.
In marketing and purchasing merchandises or providing services, business operators should clearly tap the related prices, specify names, places of origin, specifications, grades, price units, prices or items, fee collection standards and other related information according to the government's regulations.
Business operators must not sell merchandises at prices above the marked prices or collect fees not specified.
Business operators must not act whatsoever in the following ways to effect abnormal price behaviors:
1. To work collaboratively with others to control market prices to great detriments to the lawful rights and interests of other business operators or consumers;
2. To engage in dumping sales (except the cases of sales of fresh and live merchandises, seasonal merchandises and stockpiled merchandises at discount) at belowcost prices in order to attain an upper hand over rivals or dominate the market and disrupt the normal production and operation order to great detriments to the interests of the State or the lawful rights and interests of other business operators;
3. To fabricate and spread price rise information for pushing up the prices to excessively high level;
4. To resort to deceitful or misleading means in terms of prices to entice consumers or other business operators into trading in terms of prices;
5. To discriminate in terms of prices same kinds of merchandises or services offered by certain business operators under same trading conditions;
6. To disguisely raise or lower prices at irrational ranges by artificially raising or lowering grades of merchandises or services;
7. To seek exorbitant profits in violation of laws and regulations; and
8. To effect other illicit price behaviors that are forbidden by law or administrative decrees.
In collecting fees for services rendered, all intermediary organizations should abide by the provisions of this law, except otherwise provided by other laws.
In a bid to keep the domestic market order, business operators must observe related provisions of this chapter in selling imported merchandises or purchasing export merchandises.
Organizations of various sectors should abide by laws and regulations governing prices, persist in self-discipline with regard to prices and accept guidance from government price departments.
The government shall issue government-set or guided prices for the following merchandises and services if necessary:
1. The few merchandises that are of great importance to development of the national economy and the people's livelihood;
2. The few merchandises that are in shortage of resources;
3. Merchandises of monopoly in nature;
4. Important public utilities;
5. Important services of public welfare in nature.
Scope of specific items and uses for government-set or guided prices shall depend on the price catalogs issued by the central and local governments.
Catalogs of central government-set prices shall be fixed and revised by the price department of the State Council an published after the approval of the State Council.
Catalogs of prices to be set by departments of the people's governments of privinces, autonomous regions and municipalities within their power according to scope of specific items and uses as set in the central price catalog and be published with the examination and approval of the people's governments at the same level.
Local people's governments below the provincial, autonomous regional and municipal level shall not make their own price catalogs.
Article 20 State Council price department and other related departments shall fix government-set and guided prices according to scope of items and uses as set in the central prices and the government-set and guided prices for major merchandises and services shall get the approval from the State Council.
Price departments and other related departments of the people's governments of provinces, autonomous regions and municipalities shall fix indicative local government-set and guided prices within their respective power according to scope of items and uses as set in the local price catalogs.
People's governments of cities and counties may fix government-set and guided prices for their localities within their own power according to scope of items and uses as prescribed in the local price catalogs.
Government-set and guided prices shall be fixed according to the average cost and market supply and demand of related marchandises or services, the economic and social development and the affordance of the people, allowing rational price differentials between buying and selling, between wholesale and retail sale, among different regions and different seasons.
In fixing government-set and guided prices, price departments and other related departments shall carry out investigations into prices and costs and hear views from consumers, business operators and other quarters.
Upon investigated by government price departments and related departments in terms of prices and costs, related units should provide true fact and necessary books, documents and other materials.
In fixing government-set and guided prices for public utitities services of public welfare in nature and the prices for merchandises of monopoly in nature that are important to immediate interest of people public hearings presided over by government price department should be conveyed to solicit views from consumers, business operators and other quarters to explore the necessity and feasibility.
After the government-set and guided prices are determinded, they shall be made public by the price departments.
The scope and level of the government-set and guided prices shall properly be adjusted in the light of the operation of the national economy.
Consumers and business operators may put forward their recommendations with regard to the adjustment of the government-set and guided prices.
To stabilize the general price level is one of the major objectives of macro-economic policy. The State shall set targets for the monitoring and adjustment of general price level in the light of the requirements of the development of the national economy and the endurance of the people, list them into the national economic and social development programs and help their realization through means of monetary, fiscal, investment and import and export policies and measures.
The government shall build a major merchandise reserve system and establish a price regulation fund to control prices and stabilize the market.
In order to better control prices, government price departments shall establish a price monitoring system to monitor changes in the prices of major merchandises and services.
Whereas the selling prices of grain and other major farm produce are too low on the market, the government shall introduce protective prices and adopt corresponding measures to ensure the protective prices be put into effect.
Whereas prices of major merchandises or services rise sharply or are likely to rise sharply, the State Council and the people's governments of provinces, autonomous regions and municipalities may set limit at disparity of prices or rate of profitability for part of the merchandises, fix price ceilings or introduce other measures for intervention such as a system for announcing or recording price rises.
After adoption of above-mentioned intervention measures, provincial, autonomous regional and municipal people's governments should report to the State Council for the record.
When such abnormalities as violent fluctuation in the general price level occur nationwide, the State Council shall introduce power for the concentrated fixation of prices in the whole country or part of the regions for the time being or adopt such emergency measures as freezing part or all prices.
The intervention or emergency measures introduced according to the provisions of Article 30 and Article 31 shall be removed or lifted in time when the situations that call for such measures disappear.
The price departments of the people's governments at and above the county level exercise monitoring and checking over pricing activities according to law and mete out administrative punishments on acts that violate the law.
In exercising monitoring and checking of prices, government price departments shall exercise the following powers:
1. To inquire into people concerned or related personnel and demand for evidences or other materials relating to law-violating acts;
2. To look into and duplicate account books, bills, vouchers, documents or other materias related to price law violating acts and verify banking materials associated with price law violating acts.
3. To check property related to the price law violating acts and, if necessary, order the people concerned to stop business operation.
4. To register and keep some evidences that are liable to be destroyed or kept out of hand or is hard to obtain for which people concerned or related personnel must not in any case remove, hide or destroy.
In accepting the monitoring and checking by government price departments, business operators should provide their account books, bills and vouchers, documents or other materials needed for such monitoring and checking.
The personnel of government prices departments are wholly prohabited to use materials or information obtained according to law for purposes other than price control or reveal business secrets of the people concerned.
Consumer organizations, workers' price monitoring organizations, neighborhood committees, village committees and consumers have the right to exercise monitoring over price activities. Government price departments should give a full play to the monitoring roles of the people.
Medias have the right to mobilize public opinion for the monitoring of prices.
Government price departments shall establish a system for reporting acts of violation of the price law.
Any unit or individual has the right to report acts of violation of price law and the government price departments shall encourage such reporting and undertake to keep secret what concerns concerning the reporters.
Business operators who refuse to implement the government-set or guided prices, legal price intervention measures or emergency measures shall be ordered to correct, have their illegal proceeds confiscated and be fined concurrently for an amount less than five times the illegal proceeds. In cases of no illegal proceeds involved, a fine may still be imposed. For serious cases, they shall be ordered to stop business operation and make correction.
Article 40 Business operators who have violated one of the acts listed in Article 14 of this law shall be ordered to correct, have their illegal proceeds confiscated and be fined concurrently for an amount less than five times the illegal proceeds. In cases of no illegal proceeds involved, a warning shall be issued, together with a fine. For serious cases, they shall be ordered to stop operation for correction or have their business licenses revoked. If other laws have stipulations concerning the punishments for acts listed in Article 14 of this law, the related laws shall prevail.
Whether acts listed in 1, 2 of Article 14 and are of national in nature shall be upon the judgment of the State Council price department and whether the acts are regional in nature, they shall be confirmed by price departments of provincial, autonomous regional and municipal people's governments.
Whereas business operators have caused overpayment by consumers or other business operators in violation of price law, the part in excess of the due payment shall be returned. If damages are done, the business operators shall undertake to compensate for the losses.
Whereas business operators violate the provisions about price marking, they shall be ordered to correct, have their proceeds confiscated and be fined concurrently for an amount of less than RMB5,000.
For business operators who refuse to stop operation for correction as ordered or remove, hide or destroy things recorded for keeping according to law, a fine ranging from over one time to less than three times the value of the things removed, hidden or destroyed shall be imposed.
Article 44 Business operators who refuse to provide materials needed for price monitoring and checking or provide false materials shall be ordered to correct, with a warning. Whereas they refuse to correct within the prescribed time limit, a fine shall be imposed.
Whereas local people's governments at all levels or related government departments at all levels fix or adjust prices beyond their terms of reference or refuse to implement price intervention measures or emergency measures shall be ordered to correct and may be criticized by issuing circulars. People in charge or related people directly responsible shall be given administrative punishments according to law.
Whereas government personnel in charge of prices have leaked State secrets, commercial secrets or abused their power, resort to deception for personal gains, commit dereliction of duty or accept bribes and the cases are serious enough as to constitute crimes, criminal responsibilities shall be affixed. If a case is not serious enough to constitute a crime, an administrative punishment shall be meted out.
State administrative organs shall collect fees strictly according to law, limit fee collection items and scope and standards of fee collection. Specific administration methods for such fee collection shall be provided for separately by the State Council.
Interest rates, exchange rates, insurance premium rates, securities and futures prices shall be subject to related laws or administrative decrees instead of this law.