The Provisions are promulgated to regulate the increasing numbers of companies trying to invest overseas. They explicitly encourage legitimate competition for outbound investments whilst prohibit unfair competition that may be detrimental to other companies. While making their outbound investments, companies must comply with the principles of equality, fairness and honesty, as well as commercial ethics.

The Provisions consider the following as unfair competition acts:

  • Pursuing business opportunities by means of commercial bribery.
  • Carrying out unfair price competition with the aim of squeezing out competitors.
  • Colliding in bids.
  • Defaming competitors’ commercial reputations.
  • Making false propaganda about achievements.

While participating in fair competitions, companies must comply with the relevant regulations and rules, such as Regulations on the Administration of Contracting Foreign Projects (对外承包工程管理条例), Administrative Regulations for Foreign Labor Service Cooperation (对外劳务合作管理条例) and Measures for the Administration of Outbound Investment (境外投资管理办法).

MOFCOM, together with other relevant authorities, will establish a “bad credit record system” (“System”) to supervise competition acts in relation to outbound investments. Any company whose behavior constitutes unfair competition and is recorded in the System will be disqualified from enjoying the government’s favorable policies during the following three years.

Date of issue: March 18, 2013. Effective date: April 18, 2013.