FX.co ★ China Unveils Draft Pricing Law to Curb Price Wars and Deflation Risks

China has unveiled a draft amendment to its pricing law on Thursday, designed to mitigate excessive competition and prevent price wars in light of current deflationary pressures. This proposal targets practices such as selling products below cost to push competitors out of the market or dominate it, with exceptions for justifiable discounts involving seasonal or surplus inventory. Moreover, the draft sets out to prohibit improper pricing strategies that exploit data, algorithms, or technology. Released by the National Development and Reform Commission (NDRC), the revision is a response to the transformations in China's economy since the inception of the original law in 1998, as new business models proliferate and low-cost competition intensifies. The authorities intend to enhance regulations against price collusion, gouging, and discriminatory practices, while also addressing "involution-style" competition. The draft introduces stricter consequences, including steeper fines for price-related violations. The public is invited to submit comments until August 23.