Beijing is signaling a major shift in its market oversight strategy as it prepares to enforce a newly revised Anti-Unfair Competition Law. The State Administration for Market Regulation (SAMR) recently issued a comprehensive directive outlining how the law, effective October 15, 2025, will be used to recalibrate the incentives driving China’s massive internal market. This move represents a strategic attempt to move the economy away from the destructive 'race to the bottom' that has characterized recent industrial growth.
At the heart of the new enforcement push is a crackdown on 'involutionary' (neijuan) competition—the hyper-competitive, cutthroat dynamics that have plagued strategic sectors such as electric vehicles (EVs), lithium batteries, and solar power. By targeting predatory pricing and below-cost sales, regulators aim to preserve profit margins and ensure that competition is driven by technological innovation rather than sheer financial attrition. This reflects a broader pivot toward 'high-quality development' over raw volume.
Platform giants face renewed scrutiny under the revised law as SAMR identifies a wide array of digital tactics as unfair practices. Regulators are specifically targeting algorithmic manipulation, search ranking interference, and 'forced choices' imposed on merchants. Notably, the law now mandates that platform operators act as frontline regulators, requiring them to establish internal mechanisms to detect and report unfair competition within their own digital ecosystems.
Beyond the tech sector, the directive addresses the power imbalance between industrial giants and small-to-medium enterprises (SMEs). For the first time, regulators are explicitly empowered to intervene when large firms leverage their dominant position to delay payments to smaller suppliers. This focus on preventing payment arrears is designed to protect the liquidity of the SME sector, which Beijing views as a critical engine for the nation's 'new productive forces.'
Perhaps most significant for the international community is China's assertion of extraterritorial jurisdiction. The new rules allow Chinese regulators to investigate and punish unfair competition occurring outside China’s borders if those actions harm domestic consumers or disrupt the internal market. This move demonstrates Beijing’s growing intent to project its regulatory standards globally and protect its strategic supply chains from external interference.