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Notice of Shanghai Municipal Development and Reform Commission on Issuing the Rules of Shanghai Municipal People’s Government for Price Setting Actions

06-22-2020

Notice of Shanghai Municipal Development and Reform Commission on Issuing the Rules of Shanghai Municipal People’s Government for Price Setting Actions


Attention:All district people’s governments and all relevant commissions, offices and bureaus:

SMDRC D [2020] No.1

With a view to further standardizing the governmental price setting actions, improving the scientificity, impartiality and transparency of the governmental price setting, according to the provisions of relevant state documents and the requirements of the Municipal People’s Government for “establishing and improving the overall price planning mechanisms”, the Municipal Development and Reform Commission has studied and formulated the Rules of Shanghai Municipal People’s Government for Price Setting Actions, which are hereby issued to you with the consent of the Municipal People’s Government for your implementation.

Shanghai Municipal Development and Reform Commission

January 9, 2020


Rules of Shanghai Municipal People’s Government for Price Setting Actions


Chapter I  General Provisions


Article 1

With a view to standardizing the governmental price setting actions, improving the scientificity, impartiality and transparency of the governmental price setting, and protecting the legitimate rights and interests of consumers and operators, these Rules are formulated in accordance with the Price Law of the Peoples Republic of China, the Rules for Governmental Price Setting Actions, the Procedures for the Hearing of Governmental Price Setting, etc.

Article 2 

These Rules are applicable to the actions of the municipal price department and the relevant municipal departments, as well as the district peoples governments authorized by the Municipal Peoples Government (hereinafter referred to as the price setting organs) to formulate or adjust the price levels of the goods and services that are subject to the governmental price setting and the governmental guiding prices and the price setting mechanisms (hereinafter referred to as price setting) according to law.

Article 3

The range of prices set by the governments mainly includes important public utilities, public welfare services and goods and services operated by natural monopoly. The specific price setting contents and departments shall be subject to Shanghai Price Setting Catalogue.

The district peoples governments authorized by the Municipal Peoples Government shall set prices with the specific work to be done by the district price departments or relevant departments.

The price setting organs shall set prices within the scopes of their statutory authority, and shall not exceed their authority to set prices.

Article 4

The principles of fairness, openness, justice and efficiency shall be followed in the work of price setting.

Article 5

Pricesshall be set on the basis of the average social costs of the goods and services concerned, the market supply and demand, the requirements of the national economy and social development and the social affordability. When the prices of goods and services are closely related to those of the international markets, substitute goods and services, the relevant prices may be referred to.

The prices of the network natural monopoly segment shall be set according to the principle of “permitted cost plus rational return”.

Article 6

The municipal price department and the relevant municipal departments shall, according to the characteristics of different industries, gradually establish price setting mechanisms for goods and services, so as to realize the institutionalization of price adjustment for goods and services.


Chapter II  Price Setting Procedure


Article 7

The price setting organs shall, in the light of the needs of economic and social development, make further arrangement of price reform and formulate annual price setting plans.

Where the price setting organs are the relevant municipal departments or the authorized district peoples governments, they shall submit their price setting plans for the next year to the municipal price department before the end of November every year. The specific price setting items, preliminary price setting plans and time arrangement, etc. shall be specified in the annual price setting plans.

The municipal price department shall, according to the overall planning of price reform of the State and this Municipality, take the impacts of the price setting plans on all aspects of the society into overall consideration, grasp the timing, rhythm and strength of price adjustment, put forward policy suggestions, and take the price setting plans of important goods and services as the key points of their annual price setting work, and then submit them to the Municipal People’s Government for approval.

During the implementation of the annual price setting plans, in principle, no new price setting items shall be added in the current year. When it is really necessary to set prices, the relevant municipal departments or the authorized district peoples governments shall, after demonstrating the necessity of setting prices, seek the opinions of the municipal price department in writing.

Article 8

The price setting organs shall, in accordance with the economic and social development, the reflection of all aspects of society and the time limits for price implementation, set prices in due time.

Article 9

When setting prices, the price setting organs shall, in accordance with law, perform procedures such as price investigation, cost supervision and examination or cost investigation, listening to public opinions, legality review, group deliberation and making decisions on setting prices.

Where cost supervision and examination, expert argumentation, price hearing and risk assessment shall be carried out according to law, the relevant provisions shall be followed.

Where price setting mechanisms have been formulated in accordance with the law, the price setting organs shall determine the specific price levels in accordance with the price setting mechanisms.

Article 10

When setting prices, the price setting organs may require relevant operators, industrial organizations and relevant government departments to provide the information needed for setting prices.

Article 11

When setting prices, the price setting organs shall investigate market supply and demand, social affordability, etc., and analyze the impacts on relevant industries and consumers.

Article 12

When setting prices, the price setting organs shall carry out cost supervision and examination or cost investigation, and gradually establish cost information disclosure systems.

Where the cost supervision and examination shall be carried out according to law, the relevant provisions of the cost supervision and examination shall be followed. Without the cost supervision and examination, no price shall be set.

Article 13

When formulating the prices of goods and services with strong professionalism and technicality, the price setting organs shall invite experts from relevant departments to carry out demonstration.

Article 14

When setting prices, the price setting organs shall listen to the opinions of business operators, consumers or their representatives, as well as relevant parties.

Where opinions shall be solicited by way of hearing according to law, the price departments of the government at the same level shall organize the hearing in accordance with the relevant provisions of the price hearing; no price shall be set without hearing.

Article 15

Where the price setting may have significant impacts on the economy and society, the price setting organs shall, before the plan formulation, carry out by themselves or organize the relevant departments to carry out social risk assessment and formulate assessment reports.

Risk assessment can be carried out independently, or in combination with listening to public opinions and expert argumentation.

Article 16

After performing the relevant procedures, the price setting organs shall formulate price setting plans attached by the cost investigation reports (cost supervision and examination reports), the reports on hearing public opinions (hearing reports), etc. For those with expert argumentation or social risk assessment, expert argumentation opinions or social risk assessment reports shall also be attached. The plans shall contain the following contents:

1. the current prices, the prices to be set and the range of unit price adjustment;

2. the basis and reasons for setting the prices;

3. the impacts of price setting on related industries and consumers;

4. cost investigation conclusions or cost supervision and examination conclusions;

5. the main opinions of consumers, operators or their representatives and relevant parties and their adoption;

6. the main opinions of the hearing and their adoption for those with hearing;

7. the expert argumentation opinions and their adoption for those with expert argumentation;

8. the main contents of social risk assessment for those with social risk assessment; and

9. time, period and scope of price implementation.

Article 17

When setting prices, the price setting organs shall carry out legitimacy reviews. The methods, institutions and working rules for the legitimacy reviews shall be formulated by the price setting organs. The contents of legitimacy reviews include:

1. whether the price matters are in line with the authority and scopes specified in Shanghai Price Setting Catalogue;

2. whether the price setting procedures are in conformity with the legal procedures; and

3. other matters to be reviewed.

Article 18

The price setting organs shall conduct group deliberation on the price setting plans.

Article 19

The municipal price department and the relevant municipal departments shall, in accordance with the relevant provisions, report to the Municipal Peoples Government for approval when setting important commodity and service prices.

Article 20

When the price setting organs are the relevant municipal departments, they shall consult the municipal price department in writing before making price decisions.

When the price setting organs are the authorized district peoples governments, they shall consult the municipal price department in writing before making important decisions on the prices of goods and services.

The municipal price department shall put forward policy suggestions and give written feedback after comprehensively considering the price operation and the impacts of price setting plans on all aspects of the society.

Article 21

After performing the relevant procedures in accordance with these Rules, the price setting organs shall, when it is deemed necessary to set prices, make decisions on price setting in due time. The decisions on the price setting shall state the following:

1. items and prices of price setting;

2. the basis for price setting;

3. time and scope of price implementation;

4. the names of the price setting organs that made the decisions and the dates of the decisions.

In principle, the decisions on price setting shall be made and issued by the price setting organs. When the price setting organs are relevant municipal departments, the decisions on price setting shall be copied to the municipal price department; when the authorized district peoples governments set prices, the decisions on price setting may, with the approval of the district peoples governments, be made and issued by the district price departments or the relevant departments of the district peoples governments, and copied to the district peoples governments and the municipal price department.

Article 22

The price setting organs shall, in accordance with the archives management systems, set up and keep the files for setting prices.

The files shall be set up on the basis of “one file for one price” and include: price setting plans, decisions on price setting and relevant materials.

Article 23

After the implementation of the decisions on price setting, the price setting organs shall conduct follow-up investigation and monitoring of the implementation of the decisions, and conduct post evaluation in due time. Post evaluation includes:

1. implementation of the prices, the problems in the implementation and their reasons;

2. the impacts of the operators’ operating conditions, costs, labor productivity and changes in market supply and demand on prices;

3. changes in supply and demand and prices of related goods and services;

4. the opinions of all social parties on the price setting;

5. the impacts of price setting on economic and social development, consumers and operators; and

6. other relevant information.

Article 24

After the implementation of the decisions on price setting, if the basis for price setting changes significantly, the price setting organs shall adjust the prices in due time.


Chapter III  Public Participation and Information Disclosure


Article 25

Consumers, business operators, relevant government departments and relevant parties (hereinafter referred to as the “proposers”) may put forward suggestions on price setting to the price setting organs and submit suggestions in written form. The contents of the proposal mainly include the names of the specific goods or services, the suggested prices, the basis and the reasons for the proposed prices.

Article 26

Where there are proposers in the price setting, the price setting organs shall inform the proposers of the handling of their proposals in an appropriate way.

Article 27

When hearing the opinions of business operators, consumers or their representatives, as well as relevant parties, the price setting organs may have options to solicit opinions from the public, solicit opinions in writing, hold symposiums, organize hearings, and conduct on-the-spot visits.

Article 28

Whensetting prices, the price setting organs may let the third-party organizations play an active role by means of government purchase of services.

Article 29

Except for those involving state secrets, the price setting organ shall make decisions on price setting publicly available to the public in a timely manner.


Chapter IV  Supervision Mechanism and Legal Liability


Article 30

The price setting organs shall establish strict and standardized internal supervision and restriction mechanisms.

The municipal price department shall be responsible for the supervision and guidance of the district price departments and the relevant district departments on their price setting actions; the price setting actions of the relevant municipal departments shall be subject to the supervision of the municipal price department.

Article 31

Whensetting prices, the price setting organs shall accept social supervision. Units and individuals may report illegal actions in the process of price setting.

Article 32

Where the staff members of the price setting organs commit illegal actions in the course of pricing setting work, which constitutes a crime, they shall be investigated for criminal liability according to law; if the actions do not constitute a crime, they shall be given administrative sanctions according to law.


Chapter V  Supplementary Article


Article 33

These Rules shall be interpreted by Shanghai Development and Reform Commission.

Article 34

These Rules shall be effective as of February 10, 2020 and shall be valid until February 9, 2025.