A unified market to also open doors to foreign companies
The recent official document of the central authorities aimed at accelerating the construction of a unified national market indicates that it is necessary to accelerate the establishment of a unified national market system and rules, eliminate protectionism and market segmentation, eliminate bottlenecks that restrict the business cycle, promote the smooth flow of factors of production and resources on a larger scale, and accelerate the construction of an efficient, standardized, equitable unified national market and completely open.
The document has garnered a positive response at home and abroad, as a unified market will allow market entities, including foreign-funded enterprises, to take advantage of huge development opportunities.
First, the unification of market system rules and strict regulation of abusive market competition and market intervention will give foreign-funded enterprises greater market access.
Although China has established basic market system rules, strengthened the protection of property rights, but in some regions and sectors, market access is not uniform. In addition, some regions should eliminate local protectionism and domestic market segmentation and treat foreign-invested enterprises more fairly in terms of qualification certification, business licensing, tendering and procurement.
To this end, the document makes “strengthening the unification of basic market systems and rules” the main task and promises to improve the protection of property rights, market access, fair competition and the social credit. It also aims to abolish policies that hinder market unification and hinder fair competition, as well as eliminate policies that may have discriminate against foreign-invested and non-local enterprises.
Implementing the recommendations of the document will ensure uniformity of policies, consistency of rules and good coordination across the country, which in turn will help develop a business environment based on the market and the law, and enable foreign-funded enterprises to gain better market access. .
Second, promoting high-level unification of products and services will help expand market scale and provide broad market space for foreign-funded enterprises. China has the world’s largest middle-income group and its per capita disposable income in 2021 reached 35,128 yuan ($5,244). In addition, total consumer goods retail sales reached 44.08 trillion yuan, up 12.5 percent year on year, reflecting China’s strong domestic consumer power.
In addition, domestic consumption is more focused on improving product quality rather than quantity, service consumption rather than just commodity consumption, and customization and diversification rather than imitation. As a result, new formats, new models and new consumption scenarios have emerged.
According to the document, to meet the increased demand of the population for the safety and quality of products and services, it is necessary to improve standards and measurement systems, as well as the quality of services, in addition to the optimizing the consumer environment, enhancing consumer confidence, and unleashing potential demand.
Moreover, a unified domestic market will not only add to the advantages of a very large domestic market, but also help foreign-funded enterprises gain more market space.
Third, a highly efficient and fluid domestic market will create favorable conditions for foreign companies to optimize their supply chains and strengthen their competitive advantage. Due to bottlenecks impeding the movement of domestic products, logistics and transaction costs for society as a whole remain high, and the supply chain management capacity of foreign-invested enterprises is limited. It is important to build a unified national market as it will facilitate the efficient and smooth expansion of the domestic market by promoting high-level connectivity of market facilities and creating a national market for factors and resources. Which will reduce transaction costs, facilitate the production and exchange process of enterprises, and increase the flow of factors of production in the domestic market, while creating favorable conditions for foreign-funded enterprises to optimize their supply chains. supply and improve their competitiveness.
Accelerating the construction of a large unified market requires not only the efforts of governments at all levels, but also the participation of all sectors of society, digital construction, commodity quality system and the construction of standard measurement systems being areas in which companies can play an important role. .
Furthermore, the construction of a dedicated energy market and an ecology and environmental protection market will create opportunities for market players. Therefore, foreign-funded enterprises in related industries should use their advantages to help build and actively participate in a unified national market.
The author is an associate professor of international business in the School of Economics at Capital University of Economics and Business.
Opinions do not necessarily represent those of China Daily.