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China clarifies cost accounting rules to curb low-price involution in steel
24 Sep 2026 13:33 reported by Customer service
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China’s National Development and Reform Commission and State Administration for Market Regulation have issued a notice clarifying cost accounting rules for key industrial goods to address disorderly low-price competition.
The rules center on individual enterprise costs, supplemented by industry averages, and bring loss-making sales and below-cost dumping under scrutiny, making “no selling below cost” a rigid constraint.
The policy raises the compliance costs of blind capacity expansion and works with capacity replacement measures to accelerate the exit of inefficient capacity. Pricing logic is set to shift from scale competition toward quality and service, with low-price competition in long products expected to decline.
However, as a market-order measure rather than mandatory capacity cuts, it cannot resolve demand-side weaknesses such as falling property starts and slowing exports. A full market turnaround still depends on capacity exits and a demand recovery.
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