Article 1 To standardize government pricing practices, enhance the scientific rigor, fairness, and transparency of government price-setting, and safeguard the legitimate rights and interests of both consumers and operators, these Rules are formulated in accordance with the Price Law of the People’s Republic of China.

Article 2 This Regulation applies to the acts of price authorities under provincial-level or higher people’s governments, relevant departments, and city- and county-level people’s governments authorized by provincial-level people’s governments (hereinafter referred to as “pricing authorities”) in legally formulating or adjusting prices for goods and services subject to government-guided prices or government-set prices (hereinafter referred to as “formulated prices”).

If otherwise provided by laws and regulations, the provisions thereof shall prevail.

Article 3 The state implements and will gradually refine a mechanism under which prices are primarily determined by the market, supported by macroeconomic regulation. The scope of prices set by the government is defined in Article 18 of the Price Law, with specific details subject to the central and local price lists. The price lists shall be adjusted in a timely manner according to developments in the economic and social spheres and promptly made public to the public.

The people's governments of cities and counties, authorized by the provincial people's governments, shall set prices; the specific work shall be handled by their respective price authorities.

Pricing authorities shall formulate prices within their statutory powers and shall not exceed their authority in setting prices.

Article 4 Price setting shall adhere to the principles of fairness, openness, impartiality, and efficiency.

Article 5 The formulation of prices shall be based on the social average cost of the relevant goods or services, as well as market supply and demand conditions, the requirements of national economic and social development, and society’s affordability. For goods or services whose prices are closely linked to international market prices, reference may be made to international market prices.

The price authorities under the State Council and the price authorities of provincial-level people's governments may, based on the specific characteristics of different industries, determine detailed pricing principles and methods.

Article 6 Pricing authorities shall, based on the state of economic and social development as well as feedback from various sectors of society, formulate prices in a timely manner.

Article 7 When setting prices, the pricing authority shall, in accordance with the law, carry out procedures including price (cost) surveys, solicit public input, conduct collective deliberations, make a decision on price setting, and issue a public announcement.

Where cost monitoring and auditing, expert review, and price hearings are required by law, they shall be conducted in accordance with relevant regulations.

Article 8 Consumers, operators, and relevant parties (hereinafter referred to as the proposers) may submit proposals for price setting to the pricing authority.

Article 9 When setting prices, the pricing authority may request relevant operators and industry organizations to provide the information necessary for price formulation.

Article 10 When setting prices, pricing authorities shall conduct surveys on market supply and demand as well as the public’s affordability, and analyze the impact on relevant industries and consumers.

Article 11 When setting prices, pricing authorities shall conduct price and cost surveys.

Where cost monitoring and auditing are required by law, the relevant provisions on cost monitoring and auditing shall be followed.

Article 12 When setting prices for goods and services that are highly technical in nature, the pricing authority shall engage experts from relevant fields to conduct a feasibility study.

Article 13 When setting prices, the pricing authority shall, for those cases that legally require a hearing, convene a hearing chaired by the government’s price administration department and solicit opinions from consumers, operators, and relevant parties. The specific content of the hearing shall be governed by the relevant provisions on price hearings.

For cases where a hearing is not required by law, the pricing authority may choose to solicit opinions from consumers, operators, and relevant parties through methods such as symposiums, written submissions, or online platforms.

Article 14 After the pricing authority has completed the procedures stipulated in Articles 10 through 13 of these Rules, it shall formulate a price-setting proposal. The proposal shall include the following contents:

(1) Current prices and proposed prices, as well as the unit price adjustment range;

(2) The basis and rationale for setting the price;

(3) If a cost audit has been conducted, attach the cost audit report.

(4) The impact on relevant industries and consumers after the price is set;

(5) For those that have undergone expert review, attach a summary of the expert review opinions.

(6) Opinions from consumers, operators, and relevant parties;

(7) If a hearing has been held, attach the minutes of the hearing;

(8) The timing and scope of price implementation.

Article 15 The pricing scheme shall, in principle, be subject to collective deliberation. Collective deliberation may take the form of discussions by the Price Review Committee or discussions at office meetings.

The methods of collective deliberation, the composition of personnel, and the working rules shall be stipulated by pricing authorities at or above the provincial level.

Article 16 The price authorities under the State Council and other relevant departments, when setting prices for important goods and services, shall, in accordance with the prescribed procedures, submit their proposals to the State Council for approval.

Article 17 If the pricing authority is the competent department of the industry, it shall, prior to making a decision on price setting, seek in writing the opinion of the price administration authority at the same level.

Article 18 After the pricing proposal has undergone collective deliberation and been deemed worthy of price setting, the pricing authority shall promptly make a decision to set the price. The decision to set the price shall specify the following contents:

(1) Projects for which prices are set, and the prices that are set;

(2) The basis for setting prices;

(3) The timing and scope of price implementation;

(4) Name of the pricing authority that made the decision and the date on which the decision was made.

The decision to set a price must bear the official seal of the pricing authority that made the decision.

Article 19 Except for matters involving state secrets, after a decision on pricing is made, the pricing authority that issued the decision shall publicly announce it through designated newspapers, websites, and other media.

Article 20 The pricing authority shall establish and improve an internal supervision and restraint mechanism for pricing.

The superior price authority is responsible for supervising the pricing activities of the subordinate price authorities.

The pricing activities of the business authorities shall be subject to the supervision of their counterparts in the price administration authorities.

Article 21 If a proposal is submitted regarding price setting, the pricing authority shall inform the proposer of the handling status of the proposal in an appropriate manner.

Article 22 After the price-setting decision is implemented, the pricing authority shall conduct follow-up investigations and monitoring of the implementation of the price decision. The content of these follow-up investigations and monitoring shall include:

(1) The implementation status of prices and the issues encountered during implementation;

(2) The impact of a company’s operational conditions, costs, labor productivity, and changes in market supply and demand on prices;

(3) The supply and demand conditions and price trends in the relevant goods or service markets;

(4) Opinions from various sectors of society regarding the prices set.

Article 23 If a pricing authority commits an illegal act, the government’s price administration department shall investigate and deal with it in accordance with the “Price Law.”

Article 24 If staff members of the pricing authority commit illegal acts in the course of setting prices that constitute a crime, they shall be held criminally liable in accordance with the law; if such acts do not yet constitute a crime, they shall be subject to administrative disciplinary action in accordance with the law.

Article 25 The pricing authority shall establish and archive files for price-setting in accordance with the archival management system.

Article 26 The price authorities of provinces, autonomous regions, and municipalities directly under the central government may, in accordance with these Rules and taking into account local conditions, formulate implementing details.

Article 27 These rules are interpreted by the National Development and Reform Commission.

Article 28 These Rules shall take effect as of May 1, 2006. The “Rules on Government-Set Pricing Practices (Trial)” issued by the State Planning Commission on December 16, 2001 shall be repealed concurrently.