China's top legislature recently deliberated a draft revision of the Anti-Unfair Competition Law. The law was promulgated in 1993 and has since been amended twice, in 2017 and in 2019. With the rapid development of the economy and the emergence of some new problems in its enforcement, the law badly needs improvements in order to check vicious competition among merchants using malpractices such as commercial bribery in trading activities, the use of data and algorithms to implement unfair competition and the use of extremely low prices to erode the long-term competitiveness of supply chains.

Accelerated legislation on market trading behavior will undoubtedly help regulate the market trading order while protecting the confidence of market entities. Compared with short-term policies, a long-term stable rule of law and institutional environment is more critical. For market players, that means there is a basis for laws to be followed.

The amendment of the Anti-Unfair Competition Law is also aimed at increasing the regulation of internet business activities. It is not rare for some enterprises to gain an undue advantage by manipulating search results, posting fake reviews and exaggerating transaction volumes. The revised draft stipulates that platform operators should clarify the rules of fair competition in the platform service agreement and trading rules, and take necessary measures to stop unfair competition behavior. Platform operators and merchants are also prohibited from using data, algorithms, technologies and platform rules to carry out malicious transactions.

The amendment of the Anti-Unfair Competition Law and other relevant laws to adapt them to the fast changing times is conducive to providing clear codes of conduct for market entities. By preventing and curbing unfair competition, resources will flow to the competitive enterprises, which will help improve the total factor productivity.

As China further integrates into the global economic system, strengthening the construction of a better legal environment to regulate the order of market competition is also an important move to attract foreign investment and increase China's international competitiveness. A stable and predictable market-oriented and law-based business environment is the best way to deal with vicious competition and an important step to promote high-quality economic and social development.