Pric­ing reg­u­la­tor puts lo­cal gov­ern­ments on no­tice

China Daily (Hong Kong) - - FRONT PAGE - By WANG YANFEI wangyan­fei@chi­nadaily.com.cn

The na­tion’s top pric­ing reg­u­la­tor will start a na­tion­wide probe in Jan­uary to re­strict lo­cal gov­ern­ments from in­ter­ven­ing in pric­ing be­hav­ior start­ing as part of a broad set of mea­sures to en­sure fair mar­ket com­pe­ti­tion.

The Na­tional Devel­op­ment and Re­form Com­mis­sion an­nounced ad­min­is­tra­tive warn­ings on Thurs­day to 15 gov­ern­ment de­part­ments for ad­min­is­tra­tive mo­nop­oly abuse, re­fer­ring to acts of grant­ing fa­vor­able con­di­tions to pre­ferred en­ter­prises at the ex­pense of com­peti­tors.

Lo­cal gov­ern­ments were found to guide en­ter­prises’ price-fix­ing be­hav­iors, is­su­ing dis­crim­i­na­tory con­di­tions for mar­ket en­try and ask­ing busi­nesses to use goods and ser­vices pro­vided by des­ig­nated pro­duc­ers in the power, tourism, cloth­ing and build­ing ma­te­rial in­dus­tries.

In one case, the Shanghai Mu­nic­i­pal Trans­port Com­mis­sion, the su­per­vis­ing au­thor­ity of the lo­cal cruise in­dus­try, was found to guide price-fix­ing by ask­ing cruise com­pa­nies to reach a spe­cific price mo­nop­oly agree­ment start­ing in 2009.

The NDRC did not pro­vide de­tails on whether the Shang- hai Trans­port Com­mis­sion ben­e­fited from that guid­ance.

Lo­cal de­part­ments were or­dered to im­me­di­ately re­frain from ad­min­is­tra­tive in­ter­ven­tion and were given ad­min­is­tra­tive warn­ings, ac­cord­ing to the NDRC.

The an­nounce­ment came af­ter the NDRC slapped penal­ties on two United States’ com­pa­nies within a month for mo­nop­o­lis­tic be­hav­ior, lead­ing to spec­u­la­tion that the na­tion’s anti-mo­nop­oly law en­force­ment is tar­get­ing se­lected, mainly for­eign com­pa­nies. Last week, the Chi­nese unit of Gen­eral Mo­tors was fined 201 mil­lion yuan ($28.9 mil­lion) and on Dec 9 the Chi­nese unit of Medtronic was fined 119 mil­lion yuan, both for in­fring­ing on con­sumers’ rights through price-fix­ing.

Zhang Han­dong, di­rec­tor of the NDRC’s Price Su­per­vi­sion Bureau, said is­su­ing ad­min­is­tra­tive warn­ings to do­mes­tic gov­ern­ments shows that such spec­u­la­tion is mis­placed. “In­stead of fo­cus­ing merely on mar­ket play­ers, the com­mis­sion is pro­mot­ing fair mar­ket com­pe­ti­tion by putting more em­pha­sis on law en­force­ment of gov­ern­ments’ self-re­view pro­cesses,” he said, re­fer­ring to self-re­view sys­tem in­tro­duced early in June.

The State Coun­cil pub­lished the guide­lines on es­tab­lish­ing a fair com­pe­ti­tion re­view sys­tem, ask­ing lo­cal pol­i­cy­mak­ing au­thor­i­ties to make self-re­views be­fore is­su­ing poli­cies re­lated to the eco­nomic ac­tiv­i­ties of mar­ket play­ers.

The re­view sys­tem stip­u­lates a neg­a­tive list of 18 don’ts for lo­cal gov­ern­ments that ap­ply not only to the anti-mo­nop­oly law.

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.

Wang Huowang, a se­nior of­fi­cial of the NDRC’s Price Su­per­vi­sion Bureau who was in charge of ad­min­is­tra­tive mo­nop­oly cases, said mak­ing the an­nounce­ment at the year-end alerts de­part­ments in other re­gions to the is­sue, since many lo­cal gov­ern­ment of­fi­cials have lit­tle un­der­stand­ing of fair mar­ket com­pe­ti­tion, or sim­ply dis­re­gard self-re­view sys­tem.

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