Laws of the People's Republic of China

    Article 1  These Provisions are formulated for the purpose of safeguarding
the order of the social market economy, prohibiting exorbitant profits and
protecting the rights and interests of the consumers.

    Article 2  These Provisions shall apply to the commodities and services
which have major influence on the national economy and social development and
have close relationship with the residents' life (hereinafter referred to as
the commodities and services).

    Items of the commodities and services prescribed in the proceeding
paragraph shall be promulgated and adjusted in accordance with the relevant
provisions of the State Council by the price administration department of the
State Council; of those which are carried out with the national fixed price,
they shall be executed with the national fixed price and subject to the
provisions concerning price administration of the State Council.

    The people's governments of the provinces, autonomous regions and
municipalities directly under the Central Government may, in a view of the
actual situation in their own areas, on a basis of items of the commodity and
service promulgated by the price administration department of the State
Council, decide to increase the items of the commodities and services that
have close relationship with the residents' life of their own areas and
promulgate them, and report to the price administration department of the
State Council for the record.

    Article 3  These Provisions must be observed by the citizens, legal
persons and other organizations (hereinafter referred to as producers and
operators) which are engaged in production, operation and payable service
supply within the territory of the People's Republic of China.

    Article 4  The pricing activities of the producers and operators shall be
subject to the principle of openness, fairness and good faith, implemented
with the State provisions concerning listed price for the commodities and
services.

    Article 5  The charging standard of the commodity price and service fee
(hereinafter referred to as the price) shall be complied with the following
requirements:

    (1) the price level of a certain commodity or service does not exceed the
reasonable extent of the average market price level of the same kind of
commodity or service at the same classification, during the same period, in
the same area;

    (2) the price difference rate of a certain commodity or service does not
exceed the reasonable extent of the average price difference rate of the
same kind of commodity or service at the same classification, during the same
period, in the same area; or  

    (3) the profit rate of a certain commodity or service does not exceed the
reasonable extent of the average profit rate of the same kind of commodity or
service at the same classification, during the same period, in the same area,
with the exception of the profit rate achieved by the producers and operators
by way of improving the operation management, applying new technology,
decreasing the cost or increasing the efficiency.

    Article 6  The average market price, average price difference rate and
average profit rate of the commodities and services shall be determined on
the basis of their average social cost.

    The reasonable extent of the average market price, average price
difference rate and average profit rate of the commodities and services shall
be prescribed according to its relationship with the national economy and
social development or the degree of its close relationship with the residents'
life, the situation of market demand and supply and the features of different
commodities or services at different links, in different trade lines.

    Article 7  The average market price, average price difference rate,
average profit rate, and their reasonable extent, of the commodities and
services shall, by the price administration department of the people's
governments of the provinces, autonomous regions and municipalities directly
under the Central Government together with the competent departments
concerned, be determined and prescribed according to the provisions of the
price administration department of the State Council, and promulgated; the
price administration departments of the people's governments of the provinces,
autonomous regions and municipalities directly under the Central Government
also may according to the necessity, delegate the price administration
departments of the governments of the cities or counties to determine and
prescribe the average market price, average price difference rate, average
profit rate and their reasonable extent, of part of the commodities and
services which have close relationship with the residents' life, and
promulgate them.

    The competent departments concerned and the producers and operators shall
coordinate with the determination work of the price administration departments.

    Article 8  The producers and operators shall not, in violation of these
Provisions, illegally seek profit through the following methods:

    (1) do not list the prices according to the provisions or demand a higher
price besides the listed prices;

    (2) to lie about the price cut and profit reduction, or make a price
cheating with the favouring price, discount, disposed price, lowest price and
other false price information;

    (3) to collude with each other between the producers and operators or
between the trade lines organizations, and to rig prices;

    (4) against the principle of fairness and voluntariness, to force counter
part of the deal to accept a high price;

    (5) other price cheating methods.

    Article 9  The producers and operators shall not refuse or prevent the
price supervise and inspect personnel to excite their duties according to the
law.

    Article 10  As to any exorbitant profit seeking activity on behalf of the
producers and operators, any working unit and individual shall be entitled
to have the right to complain or report to the price supervision and
inspection agencies.

    After accepting a complaint or receiving a report, the price supervision
and inspection agency shall investigate and examine the facts in time, handle
the case according to these Provisions, and give the reporters the prizes in a
view of circumstances.

    Article 11  Any violations against the provisions of Article 5 of these
Provisions shall be ordered to corrected by the price supervision and
inspection agencies; if anyone refuses to make corrections they shall be given
a warning, the unlawful income will be confiscated and may be fined to as
much as 5 times the amount of the unlawful income.

    Article 12  To those violating the provisions of Article 8 of these
Provisions, the price supervision and inspection agencies shall give a
warning, order to return the unlawful income to the sufferer, or confiscate
the unlawful income when it connot be returned, and a fine which can be as
much as 5 times the unlawful income may be imposed at the same time; if the
circumstance is serious enough to constitute a crime, the criminal liability
shall be investigated according to the law.

    Article 13  Where anyone prevents the price supervision and inspection
personnel to execute their duties according to the law through violence or
intimidation, the criminal liability shall be investigated
according to the law; those refusing or preventing the price supervision and
inspection personnel to execute their duties according to the law by means
other than violence and intimidation, shall be punished by the public
security departments according to the relevant provisions of the Regulations
of People's Republic of China on the Administrative Penalties for Public
Security.

    Article 14  Where any price supervision and inspection personnel neglect
their duties, seek personal interest and commit malpractice, or screen,
connive the exorbitant profit-making activities, the disciplinary punishment
shall be imposed; if the violation constitutes a crime, the criminal liability
shall be investigated according to the law.

    Article 15  The departments of administration of industry and commerce,
auditing, finance, taxation, public security and technological control shall,
within their respective limit of functions and powers, assist the price
supervision and inspection agencies in inspecting and dealing with any
exorbitant profit-making activities.

    Article 16  The people's governments of provinces, autonomous regions and
municipalities directly under the Central Government may, in a view of the
actual situation in their own areas, formulate measures in accordance with
these Provisions.

    Article 17  These Provisions shall be implemented by the price
administration department of the State Council.

    Article 18  These Provisions shall enter into force as of the date of
promulgation.