China’s Fair Competition Review Regulations: Progress, Uncertainty, and What Lies Ahead

Key Takeaways

• The regulations expand oversight of tax incentives, subsidies, and financial rewards for businesses.
• While a step toward long-term market stability and a level playing field, the plan raises near-term concerns about whether local governments are allowed to honor existing incentive agreements with companies, including foreign-invested enterprises.
• During this transitional period, affected companies should proactively clarify the status of their agreements with local authorities and reassess cost structures to adapt to the new standardized environment.