Fully automated robotic arms produce stamped body parts and axle components for new-energy vehicles (NEVs) at an auto parts manufacturing company in Huzhou, East China's Zhejiang Province, on July 1, 2025. Photo: VCG

China is soliciting public opinion on a draft amendment to the Price Law, pledging to regulate the market price order and break free from "rat race-style" competition.

It is the government's latest move to reward high quality industrial products and breakthroughs in innovation, which will pave the way for sustainable advancement of the economy. The comments were made on Thursday by the National Development and Reform Commission (NDRC) and the State Administration for Market Regulation (SAMR), which jointly issued a draft amendment to China's Price Law.

The amendment is intended to further clarify the criteria for identifying unfair pricing acts, with improved identification standards to detect low-price dumping. The legislation will help standardize the price order on the market, and try to stop "rat race-style" competition.

The amendment aims to improve standards for identifying unfair pricing acts, including price collusion, price gouging, and price discrimination.

The Chinese government has stepped up efforts to restrict and stop "rat race-style" competition since the beginning of this year.

In the Government Work Report delivered to the National People's Congress (NPC) in March, the government said that "we will eliminate local protectionism and market segmentation, remove bottlenecks and obstacles such as those impeding economic flows in terms of market access and exit, as well as allocation of production factors, and take comprehensive steps to address rat race competition."

In May, the China Association of Automobile Manufacturers kicked off an initiative urging all domestic new-energy vehicle (NEV) companies to maintain a fair competitive order and refrain from market monopolization.

The association noted that leading NEV firms should not stifle smaller rivals or infringe on their legitimate rights to achieve market monopolization.

This kind of "rat race-style" competition will weaken the industry's competitive strength, because companies used to cut prices and squeeze profit margins in order to gain market shares, Hu Qimu, deputy secretary-general of Forum 50 for Digital-Real Economies Integration, told the Global Times on Thursday. 

It may benefit price-sensitive consumers in the short term, but it is disadvantageous in the medium and long term because corporate profit margins will inevitably drop, which will hurt the companies in terms of future innovation capability, Hu said.

Relevant Chinese authorities have enacted a set of new regulations to address cut-throat price wars in both the NEV industry and food delivery market.

On July 18, the SAMR (State Administration of Market Regulation) summoned three major Chinese food delivery platforms— Meituan, Ele.me and JD.com—to ensure compliance with the laws and regulations by standardizing their promotional activities and engaging in fair competition.

And, measures from price monitoring to quality inspections were announced at a meeting on market competition in the NEV sector held by the Ministry of Industry and Information Technology, NDRC, and SAMR on July 19. 

China's anti-involution campaign has garnered strong backing across various industries. The majority of automakers have stepped back from aggressive price wars and committed to capping supplier payment terms at 60 days. Also, the national cement association introduced guidelines to curb destructive competition, and 33 leading construction firms joined forces in a pledge to reject involution.