China Implements New Regulations for Fair Competition Reviews to Enhance Business Environment

The State Council released Fair Competition Review Regulations to ensure a level playing field for state-owned and private companies. Administrative authorities must conduct fair competition reviews of policy measures to prevent favoritism. Policy measures that restrict market access, flow of goods, or increase production costs will not be issued.

On June 6, 2024, the State Council released the final version of the Fair Competition Review Regulations (the “regulations), in an effort to “unify the domestic environment” and level the playing field between state-owned and private companies.

The regulations, which are based on China’s Anti-Monopoly Law, will require administrative authorities to conduct fair competition reviews when drafting laws, administrative regulations, local regulations, rules, normative documents, and policy measures (hereinafter collectively referred to as policy measures), to ensure that they do not unfairly favor certain market entities.

The regulations prohibit drafting authorities from including any content in policy measures that may negatively impact market access, the free flow of goods and resources, production and business costs, or production and business activities. Policy measures found to contain any such content during the review process (or that do not qualify for the exemptions, see below) will not be issued.

Specifically, the following content that may directly or indirectly restrict market access and exit cannot be included:

They also cannot include the following content that may restrict the free flow of goods and resources:

Without a legal or administrative regulatory basis or State Council approval, they also cannot include the following content that affects production and business costs:

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