The Chinese pesticide industry, long plagued by cutthroat price competition, is witnessing a pivotal shift. In 2025, a joint announcement (No. 4) by the National Development and Reform Commission and the State Administration for Market Regulation explicitly targeted the governance of disorderly price competition. Complementing this, the China Crop Protection Industry Association (CCPIA) issued a voluntary operating code for the abamectin sector. These moves signal a new regulatory phase with profound implications for market order.
Market Reality: The Vicious Cycle of Price Wars
Competition in the abamectin market has intensified in recent years. Some manufacturers resorted to drastic price-cutting strategies to seize market share, even selling below cost. Common tactics included price guarantees, creative accounting, and disguised rebates. This race to the bottom created multiple issues: compromised product quality, reduced investment in research and development, squeezed profit margins for reputable companies, and ultimately, a threat to the sector’s sustainable development.
Legal Framework: Defining the Boundaries of Violations
The significance of the new announcement lies in its alignment with the existing legal system. According to Article 14 of the Price Law and Article 11 of the Anti-Unfair Competition Law, selling below cost for the purpose of eliminating competitors constitutes an illegal practice (with exceptions for perishable goods, seasonal sales, etc.). The CCPIA is reported to have calculated an industry average production cost for abamectin, providing a crucial benchmark for identifying potential unfair competition.
Cost of Non-Compliance: The Stakes for Companies
Companies violating these regulations now face tangible consequences. Per Article 40 of the Price Law, penalties may include confiscation of illegal gains, fines of up to five times those gains (or fines ranging from 50,000 to 5 million RMB if there are no illegal gains), and in severe cases, revocation of business licenses. Furthermore, violation records will be entered into the National Enterprise Credit Information Publicity System, adversely affecting a company’s eligibility for financing and government projects. An industry supervision and reporting channel (email: ccpia315@163.com) has also been established.
Corporate Response: An Opportunity for Transformation
For abamectin producers, compliant operation is no longer just a regulatory requirement but a strategic imperative for long-term growth:
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Cost Management: Ensure pricing aligns with industry cost standards and avoid all forms of disguised below-cost sales.
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Technology Upgrade: Increase R&D investment to develop more efficient and environmentally friendly products, building market position through technical superiority.
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Service Enhancement: Provide customers with professional technical guidance and after-sales support, thereby increasing product value.
Only when competition evolves from mere price wars to a contest of comprehensive capabilities can enterprises achieve sustainable development and enhance the global competitiveness of China’s abamectin products.
Industry Outlook
The standardized development of the pesticide industry is crucial for agricultural productivity and food safety. The implementation of Announcement No. 4 and the promotion of industry self-discipline provide an institutional foundation for rebuilding market order. Supported by legal constraints, policy guidance, industry self-regulation, and market supervision, the abamectin sector is poised to break free from the cycle of destructive price competition. By embracing compliance to safeguard agricultural production and winning market respect with quality products, the industry is set on a steadier path towards high-quality development.
