The NDRC is looking for evidence that Qualcomm abused its monopoly position by charging Chinese manufacturers more for its IP than it charges elsewhere.
It is believed that Qualcomm charges Nokia and Samsung less for patent licences than it is charging Chinese manufacturers.
If a discrepancy between Chinese pricing and pricing elsewhere is established, then an abuse of a monopoly is established, and Qualcomm becomes liable to a fine of 10% of its China revenues of $12.5 billion.
Having seen Qualcomm almost single-handedly wipe out the handset IC industry in Europe, China doesn't want to see Qualcomm stifling China's mobile IC industry in its infancy by demanding royalty rates which will make it uncompetitive.
Meanwhile Qualcomm is complaining that Chinese manufacturers are under-declaring their sales to reduce royalty payments due to Qualcomm. It is thought that Qualcomm missed out on royalties on about 200 million China-manufactured phones in Q2.
Reports say that, while the NDRC investigation continues, Chinese manufacturers are not signing licensing agreements with Qualcomm but are waiting to see what happens.
Qualcomm knows that, if it can't get manufacturers to operate legally, the manufacturers will operate illegally - simply taking Qualcomm's IP and paying Qualcomm nothing.
It makes you think that Intel's strategy of getting into bed with Chinese chip-maker RockChip could have been smart.
Goldman Sachs has downgraded Qualcomm's share price target because of reduced expectations of Qualcomm's China revenues.
But China is playing a bigger game than just pushing Qualcomm into reducing its royalty rates.
Last week Unigroup, a subsidiary of the China state-owned body Tsinghua Technologies, bought the Chinese fabless wireless IC company RDA Microelectronics.
Last year, Unigroup bought Spreadtrum.
This looks like government-directed strategy to get China into the mobile IC game. That China wants to get into ICs can be seen from the local Beijing authorities' announcement earlier this month of a $5 billion IC support fund which could be followed up by a $16 billion central government fund.
With Unigroup-Spreadtrum-RDA leading the commercial push, seconded by Huawei's chip subsidiary HiSilicon, and with the backing of large state funds, China can see a way to be a force in ICs and, in particular, mobile ICs.
When such an immovable object as China meets such an irresistible force as Qualcomm, who is going to win?
The fact that Qualcomm has gone public on the under-payments issue suggests it is so worried about the situation in China that it is trying to get help from the US Government.
Qualcomm has powerful friends in the Democratic Party with Qualcomm co-founder Irwin Jacobs holding fund-raisers for the political campaigns of President Barack Obama and Bill and Hillary Clinton at his house in La Jolla, outside San Diego.
After many years in which Qualcomm has gouged the wireless industry on patent licensing, the industry will have little sympathy for Qualcomm's predicament.