China calls halt to ac price wars

CHINA: Authorities in China have called a halt to price wars between its domestic air conditioning manufacturers and suppliers.

The National Development and Reform Commission (NRDC) price supervision and inspection and Antitrust Bureau recently met in Beijing with China’s major air conditioner manufacturers, distributors and sales channels. These included the China Chain Store & Franchise Association, the China Household Electrical Appliances Association,12 leading air conditioner manufacturers, including Gree, Haier and Midea, and retailers Suning Appliance, Gome, Jingdong Mall and Alibaba.

The meeting was called in order to “guide and supervise the operation of air-conditioning manufacturing enterprise compliance, maintain the market price of the order, and create a fair competitive market environment, and promote the healthy development of the air conditioning industry.”

According to the Xinhua Finance Agency, the industry has engaged in three rounds of price wars since last September, something which experts believe does harm to the long-term healthy development of China’s air conditioning industry.

With sales of air conditioners down on last year, it is hoped that an end to the price war will enable manufacturers to focus on value-added, high-end, energy-saving products.

The NRDC warned the industry not to breach China’s price and monopoly laws by manipulating the market price, entering into vertical or horizontal monopoly arrangements, squeezing out competitors for the purpose of dumping below cost, or using false or misunderstood price conditions or price gouging.