China Says “No More!” to Extreme Price Wars Among Companies

Intermediate | July 7, 2025

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Why China Wants to Stop Fierce Price Cutting

What Is Aggressive Price-Cutting? (China price war regulation)

Have you heard about companies selling things for very, very low prices? This is called aggressive price-cutting. This kind of strategy is now being addressed through a new policy direction called China price war regulation. It can feel good for shoppers, but China’s top leaders think it’s causing problems for their economy, and they plan to stop it.

Why Leaders Are Concerned

The government believes that when companies fight too hard with prices, it hurts the market. They say it creates “disorderly” competition. This is especially true in industries like electric cars and solar panels, where many companies are making similar products, and there might be too much supply.

New Rules and What They Mean

Legal Changes in 2025

So, what is China doing about it? A big step is a change to a law called the Anti-Unfair Competition Law. This updated law was passed on June 27, 2025, and it will start on October 15, 2025.

Key Targets of the New Law

This new law specifically says companies can’t force others on platforms to sell things below cost. It also aims to make sure online businesses compete fairly. Leaders have also talked directly to companies in troubled industries, like car makers, telling them to stop unreasonable price cuts.

What This Could Mean for China Price War Regulation

This move could mean some changes. For companies, maybe less pressure to lower prices all the time, which could help them make more profit. For shoppers, prices might not be as low as before. The government hopes this will create a healthier, more stable market overall and help the economy grow in a better way.

Vocabulary

Curb (verb): To control or limit something.
- Example: “The government wants to curb aggressive price-cutting.”
Aggressive (adjective): Very strong and sometimes forceful.
- Example: “Selling products at extremely low prices is an aggressive strategy.”
Competition (noun): A situation where companies or people are trying to be more successful than others.
- Example: “There is strong competition in the electric car market.”
Deflationary (adjective): Related to a situation where prices are falling.
- Example: “Falling prices can be a sign of deflationary pressure.”
Overcapacity (noun): A situation where companies can produce more goods than people want to buy.
- Example: “Overcapacity in the industry led to lower prices.”
Unified (adjective): Joined together or made into one.
- Example: “China wants to create a unified national market.”
Regulate (verb): To control an activity or process, especially by using rules.
- Example: “New laws will regulate market competition.”
Comply (verb): To follow a rule or request.
- Example: “Companies must comply with the new law.”
Implication (noun): A possible future effect or result.
- Example: “One implication is that prices might go up.”
Sustainable (adjective): Able to continue for a long time.
- Example: “Aggressive price wars are not sustainable for businesses.”

Discussion Questions (About the Article)

What is aggressive price-cutting, according to the article?
Which industries are mentioned as having tough price wars?
When will the revised Anti-Unfair Competition Law start?
What specific practice does the new law target regarding online platforms?
What are some potential results of this government action?

Discussion Questions (About the Topic)

Is price competition usually good or bad for consumers?
When do you think government should get involved in the market?
Have you seen aggressive price-cutting in your country?
How might stopping price wars affect innovation?
What is more important for a product: low price or high quality?

Related Idiom

“Race to the bottom”

Meaning: A situation in which companies compete with each other to lower costs or prices as much as possible, often resulting in reduced quality or standards.
Example: The intense price war was a “race to the bottom” for many businesses.

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This article was inspired by: Business Insider, July 2, 2025