PRICE LAW OF THE PEOPLE’S REPUBLIC OF CHINA

The Standing Committee of the National People’s Congress

Order of the President of the Prople’s Republic of China

No.92

The Price Law of the People’s Republic of China which has been adopted at the 29th Meeting of the Standing Committee of the Eighth
National People’s Congress on December 29, 1997 is promulgated now, and shall enter into force May 1, 1998.

President of the People’s Republic of China: Jiang Zemin

December 29, 1997

Price Law of the People’s Republic of China ContentsChapter I General Provisions

Chapter II Price Act of the Operator

Chapter III Pricing Act of the Government

Chapter IV Regulation and Control of Overall Price Level

Chapter V Supervision and Inspection over Price

Chapter VI Legal Liability

Chapter VII Supplementary Provisions

Chapter I General Provisions

Article 1

This Law is enacted with a view to standardizing the price acts, giving play to the role of price in the rational allocation of resources,
stabilizing the overall price level of the market, protecting the lawful rights and interests of the consumers and operators and
promoting the sound development of the socialist market economy.

Article 2

This Law shall be applicable to price acts taking place within the territory of the People’s Republic of China.

The prices referred to in this Law include the prices of commodities and the prices of services.

The prices of commodities mean the prices of all kinds of visible products and invisible assets.

The prices of services mean collection of fees for all kinds of paid-for services.

Article 3

The State practises and gradually perfects the price mechanism shaped mainly by the market under macro economic regulation and control.Determination
of prices shall be in line with the law of value, prices of most commodities and services shall be the market-regulated prices and
prices of an extremely small number of commodities and services shall be the government-guided prices or the government-set prices.

Market-regulated prices mean those prices determined autonomously by the operators and formed through market competition.

The operators referred to in this Law mean the legal persons, other organizations or individuals engaging in the production and management
of commodities or provision of paid services.

Government-guided prices mean those prices determined to guide the operators by the competent departments of price of the government
or other departments concerned, the baseline prices and their range of fluctuations in accordance with the pricing authority and
scope in pursuance of the provisions of this Law.

Government-set prices mean those prices determined by the competent departments of price of the government or other departments concerned
in accordance with the pricing authority and scope in pursuance of the provisions of this Law.

Article 4

The State supports and promotes fair, open and lawful market competition, maintains normal price order and carries out administration,
supervision and necessary regulation and control over price activities.

Article 5

The competent department of price under the State Council shall be uniformly responsible for the work related to prices nationwide.
Other departments concerned under the State Council shall be responsible for the work related to prices concerned within their respective
functions, responsibilities and scope.

The competent departments of price under local people’s governments at or above the county level shall be responsible for the work
related to prices within their respective administrative areas. Other departments concerned under local people’s governments at or
above the county level shall be responsible for the work related to prices concerned within their respective functions and responsibilities.

Chapter II Price Acts of the Operators

Article 6

Market regulated prices shall be practiced and determined autonomously by the operators in pursuance of this Law for commodity prices
and services prices except those to which government-guided prices and government-set prices shall apply pursuant to the provisions
of Article 18 of this Law.

Article 7

The operators shall, in determining prices, abide by the principle of fairness, being in conformity with law, honesty and credibility.

Article 8

Production and management costs and market supply and demand situation shall be the fundamental basis for the determination of prices
by the operators.

Article 9

The operators shall exert efforts to improve the administration of production and management, reduce the cost of production and management,
provide commodities and services for the consumers at reasonable prices and gain lawful profits in market competition.

Article 10

The operators shall, in accordance with their management conditions, establish and perfect internal price control system, accurately
record and verify the production and management costs of commodities and services and must not indulge in fraudulent practices.

Article 11

The operators have the following rights in the conduct of price activities:

(1)

autonomous determination of prices under market regulation;

(2)

determination of prices within the range prescribed by government guided prices;

(3)

determination of prices for trial sale of new products within the scope of products of government-guided prices and government-set
prices with the exception of specific products; and

(4)

report or filing a charge against acts infringing on his/her right of autonomous determination of prices in accordance with law.

Article 12

The operators shall, in conducting price activities, abide by laws and regulations, and observe the intervention measures and emergency
measures of government-guided prices, government-set prices and legal prices determined in accordance with law.

Article 13

The operators shall, in selling, procuring commodities and providing services, display the clearly marked price in accordance with
the provisions of the competent departments of price of the government, annotate relevant information such as the name, place of
manufacture, specifications, grade, unit of price calculation and price of a commodity or the services item and rates.

The operators shall not sell commodities with additional price besides the marked price and shall not collect any fee not indicated.

Article 14

The operators shall not commit the following unfair price acts:

(1)

manipulation of market price in collusion to the detriment of the lawful rights and interests of other operators or consumers;

(2)

dumping at the lower-than-the-cost price and disrupting the normal production and management order to the detriment of national interests
or the lawful rights and interests of other operators for the purpose of squeezing out other competitors or of sole occupancy of
the market in addition to the disposal of such commodities as fresh and living commodities, seasonal commodities and overstocked
commodities at reduced prices in accordance with law;

(3)

concoction and spreading of price-hike information, jacking up prices and pushing up over rise in commodities prices;

(4)

luring consumers or other operators to conclude transactions with it by employing falsified or misleading price means;

(5)

practicing price discrimination towards other operators with identical trading conditions in providing identical commodities or services;

(6)

procuring, selling commodities or providing services at prices raised or reduced in disguised form by adopting such means as raising
or lowering the grade;

(7)

seeking exorbitant profits in violation of the provisions of laws and regulations; and

(8)

other unfair price acts prohibited by laws and administrative regulations.

Article 15

All types of intermediate agencies shall abide by the provisions of this Law in the collection of fees in providing paid-for services.
Where laws have other provisions, the relevant provisions shall be observed.

Article 16

The operators shall abide by the relevant provisions of this Chapter and maintain the order of the domestic market in selling import
commodities and procuring export commodities.

Article 17

Industries organizations shall abide by price laws, regulations and strengthen price self-discipline and accept the guidance in the
work by the competent departments of price of the government.

Chapter III The Government’s Pricing Act

Article 18

The government may enforce government-guided prices or government-set prices when necessary for the prices of the following commodities
and services:

(1)

the prices of an extremely small number of commodities vital for the development of the national economy and people’s life;

(2)

the prices of a small number of commodities the resources of which are rare or short;

(3)

the prices of commodities under natural monopoly management;

(4)

the prices of essential public utilities; and

(5)

the prices of essential non-profit services.

Article 19

The pricing catalogs of the Central Government and local governments shall be the basis for the pricing authority and specific applicable
scope of government-guided prices and government-set prices.

The Central Pricing Catalog shall be compiled and revised by the competent department of price under the State Council and published
upon approval of the State Council after submission.

Local Pricing Catalogs shall be compiled by the competent departments of price of people’s governments of the provinces, autonomous
regions and municipalities directly under the Central Government in pursuance of the pricing authority and specific applicable scope
provided for in the Central Pricing Catalog and published upon examination and finalization of the competent department of price
under the State Council after the verification and approval of the people’s governments at the corresponding level.

Local people’s governments at all levels below people’s governments of the provinces, autonomous regions and municipalities under
the Central Government shall not compile pricing catalogs.

Article 20

The competent department of price and other departments concerned under the State Council shall determine the government-guided prices
and government-set prices in pursuance of the pricing authority and the specific applicable scope provided for in the Central Pricing
Catalog;among which the government-guided prices and government-set prices of the prices of essential commodities and services shall
be submitted to the State Council for approval in accordance with provisions.

The competent departments of price and other departments concerned of people’s governments of the provinces, autonomous regions and
municipalities directly under the Central Government shall determine the government-guided prices and government-set prices for implementation
in their respective areas in pursuance of the pricing authority and specific applicable scope provided for in Local Pricing Catalogs.

Municipal and county people’s governments may, in accordance with the authorization of people’s governments of the provinces, autonomous
regions and municipalities directly under the Central Government and in pursuance of the pricing authority and specific applicable
scope provided for in Local Pricing Catalogs, determine the government-guided prices and government-set prices for implementation
in their respective areas.

Article 21

Determination of the government-guided prices and government set prices shall be based on the average costs of society and market
supply and demand situation of relevant commodities or services, requirements of national economic and social development and tolerance
of society and difference in prices in procurement and marketing, wholesale and retail, regions and seasons shall be followed.

Article 22

Competent departments of price and other departments concerned of the government shall, in determining the government-guided prices
and government-set prices, conduct price and cost survey and solicit the views of the consumers, operators and the quarters concerned.

When the competent departments of price of the government conduct price and cost survey of the government-guided prices and government-set
prices, the units concerned shall truthfully report the information and provide necessary account books, documents as well as other
materials.

Article 23

The system of testimony shall be established under the chairmanship of the competent departments of price of the government to solicit
the views of the consumers, operators and the quarters concerned to authenticate its necessity and feasibility in determining the
government guided prices and government-set prices of the prices of public utilities, prices of nonprofit services and prices of
commodities under natural monopoly management which involve the vital interests of the masses.

Article 24

The government-guided prices and government-set prices shall, upon determination, be released by the department determining the prices
to the consumers and operators.

Article 25

The specific applicable scope and price level of the government-guided prices and government-set prices shall be adjusted at an appropriate
time in the light of the economic performance and in pursuance of the pricing authority and procedures provided for.

The consumers and operators may come up with proposals for adjustment of the government-guided prices and government-set prices.

Chapter IV Regulation and Control of Overall Price Level

Article 26

Stabilization of the overall market price level constitutes an important macro-economic policy goal of the State. The State determines
the regulatory goals of the overall market price level on the basis of the requirements of the development of the national economy
and tolerance of society, integrate them into the national economic and social development plan and bring about their realization
through comprehensive employment of monetary, fiscal, investment, import-export and other policies and measures.

Article 27

The government may establish essential commodities reserve system and establish the price regulatory fund to regulate prices and stabilize
the market.

Article 28

To keep up with the requirements of price regulation and administration, the competent departments of price of the government should
establish the price monitoring system to monitor the change in prices of essential commodities and services.

Article 29

The government may bring into effect the protective prices in procurement when the market purchasing prices of such essential farm
produce as food grains and other produce are too low, and adopt corresponding economic measures to guarantee its realization.

Article 30

When there is a marked rise in the prices of essential commodities and services or there exists the possibility of a marked rise,
the State Council and people’s governments of the provinces, autonomous regions and municipalities directly under the Central Government
may take such intervention measures as restricting the price differential ratio or profit ratio, prescribe the restricted price,
practice the price rise submission system and the price adjustment record system with respect to part of the prices.

People’s governments of the provinces, autonomous regions and municipalities directly under the Central Government shall, in adopting
the intervention measures prescribed in the preceding paragraph, submit the same to the State Council for the record.

Article 31

When drastic fluctuations and other abnormal conditions occur in the overall market price level, the State Council may take emergency
measures of temporarily concentrated pricing authority, partial or comprehensive price freeze nationwide or in parts of the regions.

Article 32

Upon elimination of the circumstances for the implementation of the intervention measures and emergency measures in pursuance of the
provisions of Articles 30 and 31 of this Law, the intervention measures and emergency measures shall be lifted in time.

Chapter V Price Supervision and Inspection

Article 33

The competent departments of price of people’s governments at or above the county level shall conduct supervision and inspection over
price activities in accordance with law and impose administrative sanctions against law-breaking acts in price in pursuance of the
provisions of this Law.

Article 34

The competent departments of price of the government may, in conducting price supervision and inspection, exercise the following powers:

(1)

inquire the interested party or the person involved and demand that he/she provides testimonial materials and other information relating
to law-breaking acts in price;

(2)

inquire into and duplicate the account books, invoices, vouchers, documents and other materials relating to law-breaking acts in price,
and check the bank information relating to law-breaking acts in price;

(3)

investigate the properties relating to law-breaking acts in price, and may order the interested party to suspend the relevant business
when necessary; and

(4)

may register for safekeeping in advance under circumstances that the evidences may be destroyed and lost or may be difficult to obtain
later, the interested party and the person involved must not transfer, conceal or destroy the same.

Article 35

When subject to the supervision and inspection of the competent departments of price of the government, the operators should truthfully
provide the account books, invoices, vouchers, documents and other materials necessary for supervision and inspection.

Article 36

Functionaries in charge of price of government departments must not use the materials or information obtained in accordance with law
for any purposes other than price control in accordance with law and must not divulge the business secrets of the interested party.

Article 37

Consumer organizations, price supervision organizations of workers and staff members, neighborhood committees, villagers’ committees
and other organizations as well as the consumers have the right to conduct social supervision over price activities. The competent
departments of price of the government should give full play to the supervisory role of the masses in price.

Media units have the right to exercise supervision over price through public opinion.

Article 38

The competent departments of price of the government should establish the reporting system of law-breaking acts in price.

All units and individuals have the right to report on law-breaking acts in price. The competent departments of price of the government
should give encouragement to the informants and be responsible to keep the secret for the informants.

Chapter VI Legal Liability

Article 39

Any operator who fails to implement the government-guided prices, government-set prices and legal price intervention measures and
emergency measures shall be ordered to make a rectification, confisticated of the illegal gains and may be concurrently imposed a
fine of less than five times of the illegal gains; where there is no illegal gains, a fine may be imposed; where the circumstances
are serious, an order shall be issued for the suspension of business operations for consolidation.

Article 40

Any operator who commits any of the acts listed in Article 14 of this Law shall be ordered to make a rectification, confisticated
of the illegal gains and may be concurrently imposed a fine of less than five times of the illegal gains; where there is no illegal
gains, a warning shall be administered and a fine may be imposed; where the circumstances are serious, an order shall be issued for
the suspension of business operations for consolidation, or the business license revoked by the agency of industry and commerce administration.
In the case of separate provisions of relevant laws on penalties and penalty authorities for acts listed in Article 14 of this Law,
the provisions of relevant laws may be observed.

Acts listed in Item (1) and Item (2) of Article 14 of this Law national in nature shall be confirmed by the competent department
of price under the State Council; those of the provinces and below the provinces regional in nature shall be confirmed by the competent
departments of price of people’s governments of the provinces, autonomous regions and municipalities directly under the Central Government.

Article 41

Any operator who causes consumers or other operators to pay more prices for illegal price acts should refund the portion overpaid;
where damage has been caused, liability for compensation shall be borne according to law.

Article 42

Any operator who violates the provision of clearly marking prices shall be ordered to make a rectification, confisticated of the illegal
gains and may be concurrently imposed a fine of less than RMB 5,000 Yuan.

Article 43

Any operator who has been ordered to suspend relevant business operations but does not suspend the operations, or transfers, onceals
and destroys properties registered for safekeeping in accordance with law shall be imposed a fine of more than 100% less than three
times of the relevant business revenue or of the value of the properties transferred, concealed or destroyed.

Article 44

Whoever refuses to provide information required for supervision and inspection in accordance with the provisions or provides false
information shall be ordered to make a rectification and administered a warning; whoever fails to make a rectification on expiry
of the specified time period may be imposed a fine.

Article 45

Local people’s governments at all levels or the departments concerned of people’s governments at all levels that violate the provisions
of this Law, overstep the pricing authority and scope in determining and adjusting prices without authorization or fail to implement
the legal price intervention measures and emergency measures shall be ordered to make a rectification and may be criticized in a
circular; the person-in-charge held directly responsible and other persons directly responsible shall be given administrative sanctions
according to law.

Article 46

Any functionary in charge of price who divulges state secrets, business secrets and abuses power, indulges in self-seeking misconducts,
neglects duties, extorts and accepts bribes constituting a crime shall be investigated of the criminal liability in accordance with
law; where a crime has not been constituted, sanctions shall be imposed according to law.

Chapter VII Supplementary Provisions

Article 47

Fee collection by state administrative agencies should be effected in accordance with law, items for fee collection put under stringent
control and scope of fee collection and rates restricted. Specific control measures for fee collection shall be worked out separately
by the State Council.

Provisions of relevant laws and administrative regulations apply to interest rates, exchange rates, premium rates, and securities
and futures prices, and this Law shall not be applicable thereto.

Article 48

This Law shall enter into force as of May 1,1998.