Nation to crack down on market barriers

China will take more "powerful" actions to crack down on local protectionism and hidden market thresholds to create a fair market for all businesses, as a fair competition review system will come into force in August, said the country's top market regulator on Friday.

Zhou Zhigao, an official of the State Administration for Market Regulation, said at a State Council news conference that there still appear to be a few pockets of local protectionism but the implementation of the fair competition review system aims to take more "powerful" actions to crack down on such practices.

For instance, when formulating laws, rules and policies related to business activities, related national and local authorities will be required to conduct reviews over aspects like market entry and exit, the free flow of goods, and operational costs and practices, Zhou said.

"Such laws, rules and policies should not contain unreasonable or discriminatory conditions on market access, or restrict the entry of products from outside places into the local market," Zhou said.

"Also, authorities are forbidden to grant specific businesses tax breaks or give selective or differentiated incentives or subsidies to companies," he said, adding that local governments are prohibited from illegally interfering with the price levels that should be regulated by the market; they should not exceed their legal authority to set guided prices.

Zhou said more than 1.61 million pieces of policies and measures have been reviewed across the country, and 93,000 policies and measures that had eliminated or restricted competition have been abolished or revised.

The SAMR has also carried out a third-party assessment of the implementation of the fair competition review system in some provinces for three consecutive years, he said.

In 2016, the State Council, China's Cabinet, proposed the establishment of such a system. In 2022, the amended Anti-Monopoly Law explicitly stated the need to establish and improve a fair competition review system, signifying its integration into the country's legal framework.

Zhong Gang, executive director of the Competition Law Research Institute at the East China University of Political Science and Law in Shanghai, said the fair competition review system proposed that the fair competition review work should be included in the assessment and evaluation of local governments, which will drive the establishment of a unified national market.

"Also, in the face of some conflicts between competition policies and industrial policies, the fair competition review system further proposed some exceptional policies that may exclude or restrict competition," Zhong said.

"All these efforts are expected to remove some invisible thresholds that some private enterprises have encountered, which will help build a more international, fair market for all."