China Expands Crackdown on Ghost Kitchens and Market Infractions

China's State Administration for Market Regulation announced plans to deepen its enforcement campaign against "ghost food delivery" kitchens, aligning the push with broader national efforts against telecom fraud and organized crime. At a national enforcement meeting, officials reported that market regulators handled 641,700 cases and collected 6.982 billion yuan in fines and confiscations during the first half of 2026. For the remainder of the year, authorities aim to target cutthroat industry competition, strengthen criminal-administrative coordination, and implement lenient enforcement for minor, first-time infractions.

Ghost delivery operations—unlicensed or fraudulent commercial kitchens operating solely on delivery apps—threaten consumer safety and subvert regulatory oversight. By tying market monitoring to anti-gang and telecom fraud campaigns, Beijing is elevating platform-based hygiene and licensing violations from routine administrative infractions to multi-agency criminal enforcement, signaling increased pressure on food delivery platforms to verify merchant identities.

China's top market oversight authority announced that it will intensify nationwide inspections targeting fraudulent "ghost food delivery" merchants, connecting routine food safety oversight with high-level enforcement against telecom fraud and organized crime. According to an official readout from a national law enforcement conference reported by Xinhua, the State Administration for Market Regulation (SAMR) reviewed progress from the first half of 2026 and mapped out key enforcement priorities for the rest of the year. During the first six months of 2026, market regulatory authorities across China investigated and resolved 641,700 cases, levying 6.982 billion yuan ($980 million) in total fines and confiscated assets. Officials noted that the initial phase of the special campaign against "ghost food delivery"—unlicensed, fictitious, or unsanitary kitchens that exist only as digital listings on online delivery platforms—yielded measurable progress in stabilizing market order and protecting consumer welfare. Moving forward, the agency will deepen this operation, integrating enforcement with national campaigns targeting telecom scams and organized crime while formalizing mechanisms that transfer serious administrative violations directly to judicial authorities for criminal prosecution. Regulators outlined four primary areas of focus for the second half of the year. First, inspections will concentrate on curbing disordered, cutthroat competition across industries while deploying the consumer-protection "Iron Fist" campaign to penalize violations involving food, electric bicycles, and deceptive measurement equipment. Second, SAMR instructed regional bureaus to implement service-oriented, balanced enforcement, allowing exemptions or reduced penalties for business entities that commit minor, first-time offenses and proactively correct them. Third, enforcement bodies will upgrade digital investigative infrastructure by relying on clustered case-handling models and improved electronic evidence tools to resolve evidentiary bottlenecks in complex online cases. Finally, the agency pledged to standardize inspector conduct and reinforce internal discipline through ongoing operational reviews, aiming to ensure consistent compliance standards across regional offices.