Six Chinese polyvinyl chloride (PVC) manufacturers have been fined by the National Development and Reform Commission (NDRC) for price fixing in the market for PVC. They are Yibin Tianyuan Group (RMB 16.01 million), Sichuan Jinlu Group (RMB 10.21 million), Ningxia Younglight Chemicals Co. (RMB 7.91 million), Inner Mongolia Juzheng Energy and Chemical Group (RMB 29.48 million), Elion Clean Energy Co (RMB 20.6 million), and Inner Mongolia Eerduosi Resources Co. (RMB 19.37 million). The NDRC has yet to make any formal announcement in relation to its penalty decision in this sector. However, the six companies announced details of the fines in announcements made to the Shenzhen and Shanghai Stock Exchanges in September 2017.
The case concerned the manufacturers’ participation in the ‘Western China PVC Association’ conference in 2016, and the exchange of price information and agreements to fix the sale prices of PVC products through group chats on WeChat, a Chinese messaging application. In early 2017 the NDRC conducted an investigation into several PVC manufacturers and found the exchange of price information and price fixing agreements to be in breach of China’s Anti-Monopoly Law (AML), since such conduct severely limited market competition, damaged fair market order and harmed downstream companies and consumers.
Ningxia Younglight Chemicals announced that it would exercise its right to raise a defence under Article 32 of the Administrative Penalty Law, so as to not let its penalty reduce its profits, but the other five companies have no plans to seek reviews of their respective penalty decision. This would be an interesting development as the NDRC’s decisions under the AML have rarely been challenged (if at all) in practice.