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Amid the drive to establish a unified national market and enhance the business climate, the fair competition review process has evolved from mere policy guidance into a mandatory statutory duty.

Legal footing

The Regulation on Fair Competition Review sets out four core criteria and a definitive negative list for scrutiny, while the Measures for the Implementation of the Regulation on Fair Competition Review, issued as subsidiary departmental rules, offer detailed elaboration and a procedural roadmap for enforcement.

Within the pivotal areas of tendering, bidding and government procurement, targeted prohibitions against exclusionary and restrictive conduct are set out in the Fair Competition Review Rules for Tendering and Bidding. The Government Procurement Law further codifies the principle of fair competition, mandating that no party shall impede or limit a supplier¡¯s unfettered entry into the public procurement marketplace.

A robust legal architecture for fair competition review has been established. Anchored by the Anti-Monopoly Law as superior legislation, the system is clarified by the regulation, detailed in procedure by the above-mentioned measures, and supplemented by special provisions in field-specific rules, including the tendering and bidding rules and the Government Procurement Law.

Procedural chain

The effectiveness of the regime hinges on a coherent procedural chain, a closed-loop model comprising upfront review, ongoing involvement, and subsequent monitoring.

Responsible body and timing. Primary responsibility for review rests with the drafting entity. This means review is not a perfunctory post-hoc endorsement, but rather embedded throughout the research, drafting and revision of policy. It necessitates collaboration between operational and legal departments from the policy¡¯s inception.

Review standards and exceptions. Central to the review is evaluation of a measure¡¯s impact on fair competition. Drafting bodies must apply four standards to ascertain whether a policy has an exclusionary or restrictive impact on competition. The process must incorporate the views of interested stakeholders and, should broader public concerns arise, solicit open feedback.

The framework does not impose a ban on policies that may affect competition. Policies are exempt if they: are necessary for national security or societal benefit; represent the least harmful means available; and operate within a reasonable timeframe. The bar for this exemption, however, is set exceptionally high, and the rationale must be exhaustively detailed within the review conclusion.

Supervision and enforcement. The system¡¯s efficacy rests on stringent oversight. National and local market regulators are empowered to direct, monitor, conduct spot inspections, process complaints and carry out investigations. Any entity or individual retains the right to report policies or measures deemed in violation of the regulation.

Violations and countermeasures

Market access and withdrawal. A common contravention is the establishment of hidden barriers. These manifest as elevated eligibility criteria, additional approvals disguised as administrative filings, or discrimination based on corporate form. With tendering, stipulations compelling bidders to establish a local presence or make local social security contributions are unjustified restraints.

Operational divisions framing entry requirements must benchmark against the unified national negative list for market access. Any criteria relating to qualifications or scale shall be strictly necessary and proportionate to the project¡¯s specific objectives. It is impermissible to tie such requirements to incidental attributes, such as the locality or corporate form of the business.

Free movement of goods and production factors. Protectionist practices are prohibited. Examples include granting preferential scoring in tenders or procurement processes based on local experience or awards, and stipulating local tax contributions or domicile as prerequisites for financial grants or subsidies.

Evaluation criteria in procurement and tendering should centre on bidders¡¯ capabilities, product quality and service standards, excluding provisions that discriminate on grounds of geographic origin.

Tendering, bidding and government procurement. A common infringement involves impinging upon the autonomy of market operators. Examples include designating a tendering agent, and embedding procurement specifications with parameters favouring specific brands or patents.

Tendering entities and procuring bodies must respect the autonomy conferred by law. Procurement specifications should describe functional and performance objectives in neutral terms, rather than reproducing the particulars of a given supplier. The selection of agencies and deployment of procurement procedures must adhere to legal and regulatory provisions, ensuring transparency and equality of opportunity.

Compliance recommendations

Establishing a monitoring and reporting mechanism. Businesses should closely track the rollout of policy instruments impacting economic operators in their relevant spheres. Should instruments feature anti-competitive provisions, active recourse to established complaint mechanisms is advised.

The market regulator maintains a reporting process accessible to all entities and individuals. Timely intervention serves both to protect one¡¯s equitable access to the market and to advance the broader objective of an improved business climate.

Detecting and defying market barriers. Enterprises engaged in tendering must examine bid documents and regional policies for prohibited practices, specifically: (1) compulsory local establishment or local fiscal and social security contributions; (2) stipulation of local track records or accolades as qualifying criteria; and (3) prescription of security formats or mandated sourcing of guarantees from designated bodies.

Corporate counsel should equip business units to identify these impediments and, under the tendering and bidding rules, pursue formal challenge or complaint procedures to preserve the company¡¯s entitlement to compete on equal footing.

Taking a cautious approach to government pacts and sectoral policies. When entering into agreements concerning access to resources, subsidies or incentives, or when engaging with industrial park policies, businesses must assess whether such arrangements rest on a sound legal footing, and whether they confer selective or differential advantages upon particular operators.

This step safeguards against the legal prejudice and commercial uncertainty triggered by subsequent policy correction or withdrawal. Businesses must also refrain from engaging in or supporting any monopoly behaviour imposed by compulsion.

Yan Ge is a senior partner and Li Xiang is a partner at Joint-Win Partners.