On May 13, 2024, the Ministry of Justice of China (MOJ) issued the Announcement on Clearing up Laws, Regulations and Policies Concerning Unequal Treatment of Enterprises (referred to as “the Announcement”), calling for public feedback on issues and hints on unfair treatments for enterprises among all existing laws, regulations and policies. The feedback deadline is September 30, 2024.
The Announcement is issued under the State Council’s request on the topic, and it outlines 5 scenarios that are defined as “unequal treatments” with further explanation as below:
Hindering market access and exit.
Setting unreasonable or discriminatory entry and exit conditions in infrastructure project construction, tendering and bidding, and government procurement; Restrict the operation, purchase and use of commodities and services provided by specific business operators; Set up establishment of procedures and intermediary services in the nature of administrative license, such as examination and approval procedures and pre-record procedures without legal basis from laws and regulations or decisions of the State Council; Set up approval or filing procedures on approval for industries, fields and businesses that are not on the negative list for market access; Illegally establishing franchise rights or granting franchise rights to enterprises without fair competition.
Impeding equal access to and free movement of factors of production and free movement of goods and services.
Discriminatory pricing policies and discriminatory subsidies for goods and services imported from abroad; Restricting the access of foreign and imported goods and services to the local market or impeding the transport of local goods and services to get out of the region; Excluding and restricting foreign enterprises from participating in local public resource trading activities; Excluding, restricting or forcing foreign enterprises to invest or set up branches or business premises locally; Discriminatory treatment of local investment or branches established by foreign enterprises, infringing on their legitimate rights and interests; Illegal addition of migration conditions, restricting the migration or withdrawal of enterprises; Unreasonable restrictive provisions that are imposed on the acquisition of capital, land, talents and other elements by enterprises.
Affecting production and operation costs.
In violation of laws and regulations, preferential policies that are given to specific enterprises in terms of financial subsidies, access to factors, taxation, environmental protection standards, and emission rights; Illegally linking fiscal expenditures to tax or non-tax income paid by specific enterprises; Reduce or suspend the payment of social insurance fees and taxes that should be paid by specific business operators in violation of laws and regulations; Illegally requiring operators to provide or withhold various types of deposits; Set discriminatory requirements for obtaining government investment funds, loans and other financing.
Affecting the production and operation of enterprises.
Illegally force an enterprise to engage in the monopoly acts prescribed in the Anti-Monopoly Law of the People's Republic of China; Illegally disclosing or requiring enterprises to disclose sensitive information of production and operation, providing convenient conditions for other operators to engage in monopoly behavior; Illegal government pricing beyond the pricing authority; To illegally intervene in the market to regulate the price level of goods and services.
Administrative supervision and law enforcement.
Illegally set differentiated discriminatory inspection items and inspection frequency among enterprises; Sets discrete administrative benchmark for different enterprises, and makes administrative penalties, administrative enforcement measures, and administrative enforcement decisions that are obviously discriminatory against specific enterprises.
Feedback can be submitted via email to fgql@chinalaw.gov.cn, and submitting party must specify:
· Name of the law, regulation or policy.
· Document/notice/announcement number (if applicable)
· Issuing date
· Detailed contents on the unequal treatment and relevant description.
Such action is supportive to China’s narrative in recent years on expanding the country’s opening-up level. Similar action has been taken in the yar of 2023, when 4 national ministries issued a notice to clear up policies and measures that barricade a unified market and the fair competitions. This kind of measures will be friendly to foreign stakeholders in regards of a better business environment, so it is also advised to actively provide feedback if any.