Laws of the People's Republic of China

No. 44

In accordance with the Price Law of the People's Republic of China, we have amended the Rules for the Pricing Activities of the Governments (for Trial Implementation). The amended Rules for the Pricing Activities of the Governments, which have been adopted upon deliberation at the director's executive meeting of the National Development and Reform Commission, are hereby promulgated and shall go into effect as of May 1, 2006.

Attachment: Rules for the Pricing Activities of the Governments

Ma Kai, Director of the National Development and Reform Commission

March 17, 2006

Rules for the Pricing Activities of the Governments

Article 1

With a view to regulating the pricing activities of the governments, making the pricing activities of the governments more scientific, impartial and transparent, and protecting the legitimate rights and interests of consumers and business operators, the present rules are formulated according to the Price Law of the People's Republic of China.

Article 2

Where the competent departments of pricing or other relevant departments of the people's governments at or above the provincial level or the people's governments at the municipal or county level as authorized by the provincial people's governments (hereinafter referred to as the pricing organs) set or adjust, according to law, the prices of goods and services subject to government-guidance prices or government-set prices (hereinafter referred to as pricing activities), such activities shall be subject to the present rules.

Where it is prescribed otherwise by any law or regulation, such law or regulation shall prevail.

Article 3

The state shall implement and gradually improve the market-based prices and mechanism under the regulation and control of the macro economy. The government pricing scope shall be determined according to Article 18 of the Price Law, and shall in practice base on the central and regional pricing catalogues, which shall be adjusted at an appropriate time according to the social and economic development and shall be publicized to the general public in a timely manner.

The pricing activities of the governments at the municipal or county level, which have been authorized by the corresponding provincial governments, shall be put under the charge of their inferior affiliated competent departments of pricing.

The pricing organs shall set prices in light of their legitimate authorities, and shall not overstep their respective powers in any pricing activity.

Article 4

The principles of fairness, openness, impartiality and efficiency shall be abided by in the pricing activities.

Article 5

The pricing activities shall accord with the social average cost of relevant goods or services, the market situation of their demand and supply, the requirements for national economy and social development as well as social bearing capability. Where the price of any good or service is closely related to its counterpart in the international market, the international price shall be referred to.

The competent pricing department of the State Council and its counterparts of the provincial people's governments may, in light of different industrial features, determine the concrete principles of and measures for pricing.

Article 6

The pricing organs shall set prices at a proper time in pursuance of the situations of economic and social development as well as the feedbacks from all social aspects.

Article 7

When setting prices, the pricing organs s shall, according to law, go through such procedures as investigation into prices (costs), solicitation for social opinions, collective deliberation, decision on pricing, announcement and etc.

Where the cost supervisions and inspections, expert argumentations and price hearings are required by law, they shall be carried out according to the relevant provisions.

Article 8

Consumers, business operators and other parties concerned (hereinafter referred to as the advisors) may bring forward suggestion on pricing to the relevant pricing organs.

Article 9

The pricing organs may, when setting prices, require the relevant business operators and industrial organizations to provide the relevant materials as required for the pricing.

Article 10

When setting prices, the pricing organs shall carry out an investigation into the situations of market supply and demand as well as the social bearing capability, and make an analysis on the impacts on relevant industries and consumers.

Article 11

The pricing organs shall, when setting prices, carry out an investigation into the prices and costs.

Where any cost supervision and inspection is required according to law, it shall be implemented according to the relevant provisions thereon.

Article 12

When setting prices for highly professional and technical commodities or services, the pricing organs shall employ the relevant experts to hold an argumentation.

Article 13

If a hearing is required according to law when the pricing organs set any price, the competent pricing department of the government shall hold the hearing and solicit for the opinions of consumers, business operators and other parties concerned. The concrete contents of the hearing shall be subject to the relevant provisions on pricing hearings.

Where a hearing is not required by law, the pricing organs may solicit for the opinions of consumers, business operators and other parties concerned by holding a symposium, in written form or via the Internet.

Article 14

The pricing organs shall, after fulfilling the procedures as prescribed in Articles 10 through 13 of the present rules, formulate a pricing scheme that shall include the following contents:

(1)

The current price, the proposed price as well as the adjustment level per unit;

(2)

The basis and reasons for pricing;

(3)

Where any cost supervision and inspection is carried out, a report on cost supervision and inspection shall be attached;

(4)

The impact thereof on the relevant industries and consumers after a price is set;

(5)

Where an argumentation of experts is held, the Summary of Experts' Argumentation Opinions shall be attached;

(6)

The opinions of consumers, business operators and the relevant parties concerned;

(7)

Where a hearing is held, the Summary of the Hearing shall be attached; and

(8)

The implementing time and scope of the price.

Article 15

The collective deliberation system shall be adopted in principle for formulating pricing schemes. The collective deliberation may be held in the form of deliberation by the price deliberation committee or deliberation by the executive meeting.

The form of collective deliberation, composition of personnel and working rules shall be formulated by the pricing organs at or above the provincial level.

Article 16

Where the competent pricing departments of the State Council or other departments set the price of any important commodity or service, it shall, according to the relevant provisions, be reported to the State Council for approval.

Article 17

If the pricing organ is an industrial competent department, it shall solicit for the opinions of the competent pricing departments at the same level in written form before any decision is made.

Article 18

Where the relevant pricing is deemed as necessary after a pricing plan has been collectively deliberated, the pricing organ shall, at a proper time, make a decision on pricing, which shall include the following contents:

(1)

The items subject to pricing and the proposed price;

(2)

The basis for pricing;

(3)

The time and scope for implementing the price; and

(4)

The name of the pricing organ that has made the decision as well as the day when the decision is made.

The Decision on Pricing shall be affixed with the seal of the pricing organ that has made the decision on pricing.

Article 19

Apart form that any state secret is involved, after a decision on pricing is made, the pricing organ that has made the decision shall publicize it to the general public via the media such as the designated newspapers and websites.

Article 20

The pricing organs shall establish and improve the internal supervision and restriction mechanism for pricing.

The competent pricing department at a higher level shall take charge of the supervision over the pricing activities of its inferior competent pricing departments.

Any pricing activity conducted by the competent industrial department shall be subject to the supervision of the competent pricing departments at the same level.

Article 21

If any advisor is involved in a pricing activity, the pricing organs shall, in a proper way, inform the advisor of the treatment on his advice.

Article 22

After a decision on pricing is implemented, the pricing organ shall conduct follow-up investigation and supervision on the implementation of the pricing decision, which shall include the following contents:

(1)

The implementation of the price and the existing problems thereabout;

(2)

The impact on the price as incurred from the business operation, costs, labor productivity and the fluctuation of the market situations of supply and demand;

(3)

The market situations of supply and demand of the relevant goods or services as well as the price fluctuation; and

(4)

The opinions from all social aspects on the price as set.

Article 23

Where the pricing organ has any law-breaking act, the competent pricing department of the government shall carry out the corresponding investigation and punishment according to the Price Law.

Article 24

Where any functionary of the pricing organs has any law-breaking act during the pricing activities and thus a crime is constituted, he shall be subject to criminal liabilities according to law. Where a crime is not constituted, he shall be imposed upon an administrative sanction according to law.

Article 25

The pricing organs shall, in accordance with the administrative rules for archival filing, establish pricing files and put them on records.

Article 26

The competent pricing department of a province, autonomous region, or municipality directly under the Central Government may, according to the present rules and in combination of the local situation, formulate the detailed implementation rules.

Article 27

The power to interpret the present rules shall remain with the National Development and Reform Commission.

Article 28

The present rules shall go into effect as of May 1, 2006. The Rules for the Pricing Activities of the Governments (for Trial Implementation) as promulgated by the National Development and Reform Commission on December 16, 2001 shall be abolished simultaneously.