Chapter One General Provisions

Article 1 This law is drawn up in order to safeguard the healthy development of the socialist market economy, encourage and protect fair market competition, prohibit unfair competition, safeguard the legal rights and interests of managers.

Article 2 Managers shall abide by the principle of voluntariness, equality, impartiality, honesty and good faith, and also adhere to public commercial moral in their business transactions.

"Unfair competition", in this Law, means activities made by managers who damage the others' legal rights and interests, disturbe the order of social economy and violate the provisions of this Law.

"Manager", in this Law, means the legal person, the other economic organisations and individuals who deal with commercial business or profitable service (commodities in this Law in hereafter as to commodity which includes service).

Article 3 The governments in all levels shall adopt methods to prohibit unfair competition and to create the sound environment and conditions for fair competition.

The Bureaus of Industrial and Commercial Management of the People's Government over the county level supervise unfair competition, except for the supervision made by the other organisations in accordance with the provisions of the other laws or regulations.

Article 4 The State shall encourage, support and safeguard all organisations and individuals to carry out social supervising for unfair competition.

Officials in the State organs should not support or shield unfair competition.

Chapter Two Activities of Unfair Competition

Article 5 Managers should not use the following unfair methods in their business transactions which can damage other competitors:

1. to feign the others' registered trade mark;

2. to use the specific name, package, decoration of the famous or noted commodities, or use a similar name, package, decoration of the famous or noted commodities, which may confuse consumers distinguishing the commodities to the famous or noted commodities;

3. to use the name of other enterprise or personal name and make people confuse this commodity to the other's commodity;

4. to feign or pretend to be the certificate of attestation, mark of fame and high qualification, to feign the certificate of originally produced place of the commodities, which make others to misunderstand the qualification of the commodities because of the false certificates.

Article 6 Public facility enterprises or the other enterprises which legally monopolized the special market in accordance with law shall not force the others to purchase the commodities pointed by the enterprises or prohibit the competition from the other companies.

Article 7 The government and its organ shall not abuse its authority to force the others to purchase the commodities from the pointed seller or prohibit the fair competition from the others. The government and its organ shall not abuse its authority to prohibit outside commodities from going into home market, or prohibit domestic commodities from going to outside market.

Article 8 Managers shall not use money or properties or the other methods to bribe to others in order to sell or purchase commodities. It shall be guilty of giving bribe if managers give a secret commission to the other organisations or individuals without the normal accounting records. It shall be guilty of taking bribe, if the organisations or individuals accept the secret discount without normal accounting records.

Managers may offer a discount to the others in public, or may pay commission to the middle man in selling or purchasing commodities. However, managers who give discount to the others or pay commission to the middle man, or the others who take the discount or commission shall make accounting strictly according to the facts.

Article 9 Managers shall not use advertisement or the other methods to make a false propaganda for the quality, composition, function, usage, producer, time of efficacy and place of production of commodities.

Advertising company shall not be an agent of, or design, or make, or propagandize false advertisement, if it know or should know the truth.

Article 10 Managers shall not use the following methods to infringe upon business secrecy:

1. to steal, coerce, or use any other unfair method to obtain the other's business secrets;

2. to disclose, use or permit others to use the business secrets mentioned in Section 1 of this Article.

3. to violate the contract or the requirement to publish, use or permit others to use the business secrets, which were maintained as secrets by the legal owner of the business secrecy.

The third party who knows or should know the illegal activities as first mentioned, and who gains, uses or publishes the business secrecy shall be looked as activities of infringing upon the others' business secrecy.

"Business secrecy", in this Article, means the utilized technical information and business information which is unknown by the public, which may create business interests or profit for its legal owners, and also is maintained secrecy by its legal owners.

Article 11 Manager shall not sell commodity at the price lower than the commodity's cost in order to put the other competitors out of the competition.

Any of the following activities shall not be looked as unfair competition:

1. to sell fresh or live commodities;

2. to quickly sell commodities before their expiration or the other overstock commodities;

3. to cut prices or on sale in season;

4. to cut prices to sell commodity for cleaning debts, changing or suspending business.

Article 12 Manager shall not sell commodity attached with unreasonable condition or force the consumers to unwillingly purchase any additional commodity that come together with the product that the consumer buys.

Article 13 Manager shall not sell commodity with lottery ticket such as the following activities:

1. to sell commodity by the way of making fake award or arranging inside person to win the lottery;

2. to sell unqualified or high prices commodity by the way of awarding selling;

3. to sell commodity with lottery award which the top award is more than 5000 RMB yuan.

Article 14 Manager shall not fabricate, spread false facts to damage the business reputation or commodity fame of the other competitor.