In a recent move, China’s National Development and Reform Commission (NDRC) announced that individuals and companies may be fined up to 2 million RMB (295,000 US dollars) for spreading deceptive or false information concerning price hikes. The new policy stems from the Commission’s goal effort to curtail price manipulation and profiteering.
The recommend punishments for violations are now open for public debate through Aug. 13, following which the regulation will be forwarded to China’s top legislative body for a legislative reading. The most serious violators may lose their business licenses, and may also be subject to confiscation of their illegal gains and receive fines up to five times their illegal gains.
The Commission hopes the new regulations will help to mitigate inflationary expectations, and at the same time stabilize price levels. The NDRC earlier this month fined several farm produce traders in northeast China for conspiring to hike prices. Currently the government’s goal is to keep the annual consumer price inflation (CPI) at a level of 3 percent in 2010. The government recently stated that between May of this and the previous year a CPI increase of 3.1 percent occurred, which the first time this year that the governments CPI growth target has been exceeded. In June, the NDRC made a projection that the CPI rate would hover near 2.6 percent in the first half of this year. “With China’s population booming it is necessary to make sure that profits are not being made at the expense of innocent workers,” says Edward E. Lehman, Managing Director of Lehman, Lee & Xu.
Lehman, Lee & Xu is a prominent Chinese corporate law firm and trademark and patent agency with offices in Beijing, Shanghai, Shenzhen, Hong Kong, Macau, and Mongolia. The firm has also been recognized as one of the top full service as well as intellectual property firms in China by several international magazines. The law firm is managed by Mr. Edward Lehman, a leading expert on corporate law with 20 years of practice experience in Mainland China.
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