New guideline to facilitate market entities in Shanghai

Move by city aims to improve business environment, boost fairer competition

The latest measures announced by the Shanghai municipal government on Thursday to activate the growth and development of market entities showed the metropolis' resolution to guarantee a fair play business environment for its more than 3 million market entities, experts said.

The Shanghai Municipal Administration for Market Regulation issued the guideline on the development and expansion of market entities.

By taking market entities' full life cycle into consideration, the guideline looks to optimize the business environment for all businesses, including those of State-owned, foreign-funded, private and self-employed, said Qi Xiaozhai, director of the Shanghai Commercial Economic Research Center.

"Amid the backdrop of the COVID-19 pandemic, all businesses are challenged in their operations. The new guideline, by providing considerate and extensive rules, will promote business entities in Shanghai to maintain their momentum," said Qi.

The guideline aims to be systematic, inclusive and forward-looking. They fall into five main categories and include efforts to deepen reforms to facilitate the entry and exit of market entities, provide high-quality and convenient administrative services, implement high-standard service-oriented market regulation, and safeguard the materialization of measures to help the markets develop and grow.

Liu Mingyu, associate professor at the School of Management, Fudan University, said he was impressed by the degree and extent of the "service-oriented" measures.

"Giving market entities the right of making decisions on entering the market will reduce business cost and encourage entrepreneurship, while giving that on exit can boost the efficiency of resources reallocation. By improving government supervision and enhancing its service-oriented role, a better business environment can be created," said Liu.

Given uncertainties in business operations, the detailed regulations set clear boundaries for government regulations and services provided, which will boost market expectations for a healthy and stable business environment, while promoting their growth and expansion, he said.

There are more than 3.18 million market entities registered in Shanghai in December. Among them, 2.67 million are enterprises, up 10.8 percent year-on-year, said the Shanghai Administration for Market Regulation.

Every 1,000 persons in the city operate 107.4 enterprises on average, leading other Chinese cities. As many as 2,174 new enterprises are being launched in Shanghai every day. The rapid growth is not possible if not for the city's fair, stable and predictable market environment, experts said.

The guideline urged to thoroughly examine and verify policies and measures with regard to market entities economic activities, eliminate differentiated policies and measures, get rid of discrimination in ownership, location and implicit barriers, and prevent excessive use of administrative powers in competition to ensure all businesses under varied ownership and coming from different areas and regions can compete fairly and equally.

The guideline also vowed to strengthen regulatory compliance on market operation activities. Several guidelines regarding antimonopoly, online marketing algorithms and blind box sales would also be formulated and executed.

Business experts said Shanghai's new guideline on promoting market entities is a nice move in improving the business environment through laws and regulations.

The improvement in business environment will in return help the local government gain healthy, sustainable and stable tax revenues, and create "a win-win situation for government and enterprises", said Liu.