Why does China need to build a unified market?
By Dong Yu

Editor's Note: Dong Yu is the Executive Vice President of China Institute for Development Planning, Tsinghua University. The article reflects the author's opinion, and not necessarily the views of CGTN.

CFP Photo

CFP Photo

Considering the long-time mismatch between China's market scale and its production level, the country's proposal to build a unified national market is a decision based on the current stage of its economic development.

It has not been long since China became the second-largest consumer market, however, due to the interference of local administrative forces, disunity of system rules, and an awkward flow of resources in the past, the market is segmented and endures many blocking points. 

As a result, the market is somewhat out of touch with the efficiency requirements of a modern economy. For example, if one wants to do the same business in different places, he or she needs to adapt to various local rules and requirements. 

In this context, based on long-term development, the Chinese government put forward the construction of a national unified big market. The fundamental purpose is to eliminate the various obstacles between production, distribution, circulation, and consumption. It is a way for multinational companies to invest and set up factories in China without having to worry about regional differences and for Chinese consumers to enjoy the world's best products and services in a more timely manner.

In its latest document, China has advanced the basic system of "four unifications", which include property rights protection, market access, fair competition, and social credit. 

The four are the underlying rules of the healthy operation of a market. Only when rules are consistent can policies and implementation be truly coordinated.

The property rights system is the cornerstone of the modern market. Equal protection of the property rights of economic entities under all forms of ownership should be improved.

In some ways, market access principle is a means to test the fairness of the market. The management model of "one national list" should be strictly implemented.

Fair competition is the basic rule of the market. All market entities should be treated as equals. 

Credit is the soil of market growth. A full-coverage credit information network should be formed as well. This orientation of "four unification" fully demonstrates the Chinese government's respect for the general laws of the market economy.

The Chinese government is also committed to improving the quality of the market, enhancing the transparency of the market, and improving the degree of integration with the prevailing rules of the international markets. 

For example, the quality of major consumer goods in key areas should be brought in line with international standards. Domestic and foreign products should be of the same quality with the same lines, standards, and quality. This is to hope that more high-quality foreign products will enter the Chinese market and more high-quality Chinese products will be recognized by the international markets. 

In this process, China will promote more fair and unified market supervision and maintain the stability of market order with improved regulatory procedures. For example, the procedures can include standardizing law enforcement behaviors, unifying law enforcement standards and procedures, and reducing discretion. In other words, it is necessary to create a good ecology for all types of market players to invest in China. The process of building a unified market has also become a process of constantly standardizing government behavior and reducing market intervention.

If compare the large market to the popular game Elden Ring, a unified national market is like an HD map, helping players, no matter experienced or new, better explore more fun and benefits.

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