China fines 18 PVC makers for price manipulation

China's top economic planner said it had fined 18 PVC manufacturers a total of 69 million dollars for manipulating market prices.

The penalty is the largest fine since the country adopted its anti-monopoly law nine years ago.

According to an investigation that started in March 2016, the 18 companies worked to reach a series of monopoly agreements to raise the price of PVC through WeChat group chatting or closed-door meetings.

As a result, the PVC market price rose more than 40 percent in less than six months.

PVC is an important construction material for manufacturing electric, water wires and cables. [Photo: baidu.com]

The National Development and Reform Commission said the deed was a blatant violation of the anti-monopoly law, harming the market competition order, the profit margins for downstream PVC users and consumers' interests.

"Our goal is to safeguard fair competition and it is the direction toward which we should move when carrying out the anti-monopoly work. In addition, no matter what kind of enterprises, as long as they violate anti-monopoly law, we will investigate and punish in accordance with law," said Zhang Guangyuan, deputy director of Bureau of Price Supervision under the National Development and Reform Commission.

State-owned and private companies were involved in the scheme. Their PVC production accounted for three quarters of the country's total last year.

Hubei Yihua Group and China National Salt Industry Corporation Jilantai Salt Chemical Group played a leading role and proposed six meetings to discuss price hikes.

Each of the 18 companies was required to pay between one and two percent of their annual revenue as a fine.

"It's impracticable to collaborate with each other through implementing price monopoly agreements. What needs to be eliminated should be eliminated and what should be innovated should be innovated. Positive development of the market competition order will benefit both downstream operators and consumers," said Xu Xinyu with the Bureau of Price Supervision.

PVC, or polyvinyl chloride, is a main material to manufacture electric wires and cables, agricultural film and other packing materials.

It is widely used in construction materials, medical equipment and household appliances.