Price Control On Profiteering

Pursuing high profits in market competition is an inevitable choice for all operators.Since the reform and opening up,with the rapid development of market economy,some phenomena of profiteering have inevitably appeared.The price control on profiteering aims at maintaining fair trade and promoting market competition to give full play to its role,which is an important part of the deepening reform of China’s economic system.However,due to its poor operability,its implementation effect in practice is not ideal and it has become a a hanging "sword".The theoretical basis for price control on profiteering is the transaction cost theory and the incomplete contract theory.From the development of these theories,profiteering affects the decision to participate in the transaction,making the transaction that could have been reached impossible,and leading to the decline of production efficiency or dynamic efficiency.Based on this illegal analysis framework,it is concluded from law and practice that there are three main types of price control on profiteering,the supervision of abuse of superior bargaining position,the supervision of profiteering during major holidays,inflation,disasters and terrorist attacks,and the supervision of profiteering after the goods and services tax reform.In any particular transaction,if the party with the comparative advantage takes unreasonable price increase to make huge profits to hinder transactions.The other party gives up the transaction,which leads to the decrease of production efficiency or dynamic efficiency,which constitutes the abuse of the comparative advantage to make huge profits,so price control on profiteering should be carried out.During special periods such as major holidays,the serious imbalance between supply and demand leads to a sharp rise in prices,and the operating cost of market competition is too high.At this time,price control is needed,thereby reducing transaction costs,encouraging transactions,and promoting market competition to give full play.The goods and services tax reform will adjust the tax burden sharing scheme.In order to ensure that the tax reform dividend will benefit consumers and prevent the reduction of production efficiency,it is necessary to take price control as a supporting measure of the tax reform to control commodity prices,stop profiteering and better implement the purpose of the tax reform.Facing the increasing practical needs and new challenges,China’s price control on profiteering should clarify its unique functional orientation,optimize the method of determining the illegality of profiteering,strengthen the implementation mechanism,and give full play to its role.It is recommended to make appropriate adjustments and revisions to the "Interim Provisions on Curbing the Making of Exorbitant Profits",and on this basis,the implementation guidelines should be explored and formulated to provide reference for law enforcement.