Meaning of Government Pricing Acts

Government pricing acts refer to the activities of the pricing authorities or other competent authorities to formulate government-fixed prices and government referential prices within their pricing powers and functions.
According to the Pricing Law, government pricing acts are required for five types of goods and services when necessary.
(I) The prices of few goods that are of great importance to development of the national economy and the people's livelihood
Goods that are of great importance to development of the national economy and the people's livelihood involve a wide range, and not all of them are subject to government pricing or government referential pricing. Only a very few of the most fundamental goods whose price changes have a significant impact on the development of the national economy and people's livelihood require government pricing acts.
(II) Prices of a few goods with scarce resources
The resources mentioned above refer to natural resources. Scarce resources are resources with limited quantities that are impossible or difficult to regenerate. Their excessively high prices will increase the burden on consumers, and excessively low prices will stimulate abnormal increase of purchasing power, leading to excessive consumption and waste of resources. Therefore, government pricing acts are required when necessary.
(III) Prices of goods under natural monopoly management
Natural monopoly refers to a monopoly formed by excluding competition due to the constraints and requirements of resource conditions or economies of scale. If pricing is relaxed and market-regulated pricing is implemented on the basis of the objective existence of natural monopoly, monopoly of the market by sellers will lead to price increases, resulting in high monopolistic prices that buyers are forced to accept. Therefore, government pricing acts are required when necessary.
(IV) Prices of significant public utilities
Public utilities refer to the undertakings operated for the common needs of the public, such as public transportation, post and telecommunications, tap water, coal, and power supply. The prices of significant public utilities directly involve social and public interests, and public utilities are often under monopoly. Therefore, government pricing acts are required when necessary to safeguard the overall interests of communities.
(V) Prices of significant public welfare services
Public welfare services refer to services that involve public interests and are of welfare or educational nature, such as schools, hospitals, exhibition halls, museums, parks, etc. Such entities should not aim at maximizing profits. Public welfare services cover a wide range, and pricing management is necessary for significant public welfare services.