Eliminating Bottlenecks and Obstacles Hindering the Development of a Unified National Market

Further developing a unified national market represents a major decision of the Central Committee of the Communist Party of China (CPC) made in consideration of the overall situation from a higher strategic level. The Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development (hereinafter referred to as the “Recommendations”), adopted at the fourth plenary session of the 20th CPC Central Committee, sets forth significant strategic directives regarding “eliminating bottlenecks and obstacles hindering the development of a unified national market.”

I. The fundamental requirements for further developing a unified national market

In further developing a unified national market, our efforts must adhere to the following six fundamental requirements.

First, we must unify underlying market institutions across the nation

This will help reduce institutional transaction costs and serves as an essential prerequisite for ensuring the efficient functioning of a national unified market. The development of a unified national market also requires the improvement of corresponding top-level design and an institutional framework. Only by continuously improving policy uniformity and regulatory consistency can we reduce market transaction costs, prevent resource misallocation due to institutional disparities, enhance the predictability of economic activities, and mitigate uncertainty and risks. These outcomes, in turn, will foster a greater capacity for innovation and internal momentum among market entities. In order to establish a foundational system for a unified market, it is essential to address the challenge of regulatory fragmentation by strengthening high-level institution design and reinforcing institutional authority. Such institutional development will promote market integration and expansion at a greater scale, deepen specialization and collaboration across broader regions, and facilitate full and fair competition, thereby improving the overall efficiency of market operations.

Second, we must establish unified market infrastructure across the nation

This is essential to facilitate the seamless flow of logistics, capital, and information, and is a practical necessity for ensuring the smooth circulation of a unified national market. Market infrastructure constitutes the material basis for the efficient conduct of market activities and serves as the tangible underpinning that enables the invisible hand of the market to function more effectively. Only by promoting the unified and efficient connectivity of market infrastructure, including transportation and logistics, data and information systems, trading venues, and regulatory platforms, can we overcome geographical barriers, remove obstacles to the flow of market channels, and enhance the alignment of supply and demand, access to production factors, and the diffusion of technology. This will further strengthen the functioning of the market mechanism. Unifying market infrastructure also requires us to overcome regional barriers, align trading rules seamlessly across regional markets, advance connectivity between transportation and logistics facilities, and realize open, shared digital infrastructure. In doing so, we will transform market infrastructure into a “highway” for economic circulation.

Third, we must unify the standards for government conduct

Such standardization helps regulate the economic promotion activities of local governments and is an essential prerequisite for accelerating regional integration into a unified national market. Unifying the standards for government conduct is a pragmatic, necessary step to ensure that local governments manage the relationship between local and national interests and between short-term gains and long-term development properly, as well as to prevent “policy competition” from distorting market mechanisms. Only by clearly defining policy red lines and behavioral bottom lines for local economic development can we minimize improper government intervention in resource allocation and economic activities, thereby promoting better interplay between an efficient market and a well-functioning government. Unifying the standards for government conduct also requires clearly defining governmental boundaries and establishing consistent rules. This means it is essential to accelerate the development of unified regulations for attracting investment and related activities, designate prohibited zones for preferential policies, and establish a robust compliance review mechanism. These measures are critical to preventing local governments from pursuing divergent or self-directed approaches and ensuring that their economic promotion activities remain firmly grounded in the principle of fair competition.

Fourth, we must ensure unified law enforcement in market regulation

This will help foster fair competition among all types of market entities and safeguard the dynamism of a unified national market at the micro level. Market entities constitute the micro-foundation of a unified national market, and the dynamism they possess serves as the primary internal driving force for its growth. Accelerating the advancement of fair and unified market regulation will ensure that all business entities participate in market competition on an equal basis and receive equal legal protection, thereby attracting greater market participation in economic activities. In order to achieve unified law enforcement in market regulation, it is essential to balance the objectives of market vitality with effective regulation, establish uniform and transparent regulatory frameworks and standardized criteria for administrative discretion, continuously refine the enforcement standards and procedures, improve regulatory approaches, and strengthen governance capacity. In this way, a unified national market can provide a level playing field, enabling fair competition among all business entities.

Fifth, we must unify the market for resources and production factors

This will facilitate the efficient acquisition of production factors by business entities, serving as a critical step toward improving resource allocation efficiency within a unified national market. As a core function of a unified national market, the market for resources and production factors should be steered to cluster around advanced productive forces. Only by establishing a unified market for resources and production factors can we effectively remove the obstacles to factor mobility and resource allocation. This enables all types of resources and production factors to fully participate in the process of economic value creation, thereby boosting total factor productivity. It is essential to remove institutional barriers, eliminate disparities across urban-rural, regional, and industrial divides, expand the scope of market-based allocation of resources and production factors, refine property rights frameworks and trading regulations for emerging factor markets such as data and technology, and harness the capacity of a unified national market in order to integrate resources and production factors efficiently and drive value creation.

Sixth, we must continue to expand internal and external opening up

This will facilitate the integration of China’s market with the global economy and is an essential part of fostering a new development dynamic grounded in a unified national market. Developing a unified national market does not entail creating regionally isolated micro-cycles or establishing a closed, inward-looking market system. Only through the sustained integration of internal and external opening up can the scale effects of the domestic market be effectively amplified, alongside the synergistic interaction between domestic and global markets. This will realize a development dynamic that focuses on the domestic economy, while still featuring positive interplay between domestic and international economic flows. To continue opening up both internally and externally, we must adopt a strategic focus on promoting coordinated regional development and advancing high-standard opening up, accelerating the integration of regional markets, and developing new institutions for a higher-standard open economy. By leveraging the unified national market as a key driver, we can expedite the creation of a new development dynamic and gain the strategic initiative in an opening-up-driven development process.

II. The importance and urgency of eliminating bottlenecks and obstacles hindering the development of a unified national market

In recent years, all localities and government departments have achieved significant progress in developing a unified national market.

Fundamental market institutions have been continuously refined. A negative list system for market access has been introduced and implemented; a framework for competition policy has begun to take shape; and the social credit system has improved rapidly. These developments have collectively contributed to a significant reduction in government-imposed transaction costs associated with market activities. Connectivity among market facilities has continually strengthened as traditional and emerging infrastructure networks have been optimized. Marked progress has been made in lowering logistics costs while improving quality and efficiency, thereby enhancing the effectiveness of market circulation. The fluidity and efficiency of the flow of resources and production factors has been enhanced through reform of market-based factor allocation, thus successfully eliminating institutional barriers that previously constrained the free flow of production factors. The development of commodity and service markets has also advanced, supported by accelerating improvements in the modern commercial distribution system and a notable rise in quality standards, which are key to expanding domestic demand. The regulatory framework for a fair and unified market is taking shape at an accelerating pace. This development is underpinned by enhanced standardization and rigor in regulatory procedures, leading to greater order and fairness in the market and effectively invigorating market entities. Progress has also been made in dismantling market segmentation and regional protectionism, represented by the swift rectification of prominent cases involving monopolistic practices and localized protectionism, thus effectively safeguarding enterprises’ operational autonomy.

Overall, the development of a unified national market has largely involved eliminating bottlenecks and obstacles in economic flows. This has provided robust support for the creation of a new development dynamic and the advancement of high-quality development.

However, it is essential to recognize that China’s transition from a planned economy to a market economy is still in its early stage. The process of market-oriented reform has resulted in fragmented and misaligned institutions and rules in certain areas, while administrative intervention persists in some localities due to entrenched mindsets and dependency upon outdated practices. While the stimulation of local initiative has been crucial in driving China’s remarkable economic growth, it has also led to excessive interregional competition and local protectionism. The development of new markets for resources and production factors is hampered by a number of significant institutional shortcomings, particularly with regard to the definition of property rights and operational mechanisms. Furthermore, during the ongoing phase of industrial transformation and upgrading, as well as the accelerated cultivation of new growth drivers, varying degrees of rat race competition have emerged. These challenges must be prioritized and addressed in the ongoing effort to develop a unified national market.

The 15th Five-Year Plan period (2026-2030) will be critical in the process, as we work to reinforce foundations and push ahead toward basically realizing socialist modernization by 2035. A strong domestic market provides strategic support for Chinese modernization. Accelerating the creation of a new development dynamic, pursuing high-quality economic growth, building a modernized industrial system, and achieving greater self-reliance and strength in science and technology all depend on a unified national market as an essential precondition and foundational pillar. Similarly, navigating the complex and continuously evolving external environment and firmly maintaining the initiative require a strong domestic market to ensure appropriate economic growth and security. As the development of a unified national market has progressed, numerous challenges have already been overcome. However, the remaining bottlenecks are deeply entrenched and constitute difficult structural hurdles involving complex institutional issues, such as defining the respective fiscal powers of central and local governments, balancing the relationship between the government and the market, and transforming local economic growth models. Overcoming these challenges during the 15th Five-Year Plan period will be a critical and demanding endeavor.

III. Key tasks for eliminating bottlenecks and obstacles hindering the development of a unified national market

The development of a unified national market must be advanced in strict alignment with the six fundamental requirements outlined above, through resolute action to eliminate bottlenecks and obstacles hindering progress.

First, we must ensure that the institutions and rules of the market are unified across the nation

In accordance with the principle of fairness, we should enhance property rights protection and strengthen law enforcement and judicial safeguards to ensure equal, long-term, lawful protection of property rights across all forms of ownership. We should improve the systems governing market access and exit, establish a unified legal system for market entity registration and administration, refine the enterprise bankruptcy mechanism, explore creating a bankruptcy system for individuals, and move ahead with integrated reforms concerning the deregistration of enterprises. We should enhance the social credit and oversight system by building a comprehensive framework covering all types of entities, strengthening credit-based supervision mechanisms, and establishing a framework for classified information disclosure. We should improve the systems for mergers and reorganizations, advance market-oriented reforms in the mergers and acquisitions of listed companies, and refine the regulatory rules for anti-monopoly reviews of business concentration. We will improve the national standards system, further reform local management of standards, and gradually standardize the process of standards formulation.

Second, we must regulate the economic promotion activities of local governments

Strengthening the binding force of institutions is a necessary measure as we advance legislative efforts toward establishing a unified national market. Therefore, we should enhance governance frameworks to address improper government intervention in market competition and remove barriers related to production factor access, qualification accreditation, public bidding, and government procurement. We must work to eliminate local protectionism and market segmentation, comprehensively implement the fair competition review system, abolish policies and measures that impinge on fair competition, and strengthen regulation and law enforcement against administrative monopolies. We should advance the reform of the bidding and tendering system with strict regulation of participating entities, strengthened fairness reviews of award outcomes, and comprehensive oversight throughout the entire process. We should effectively regulate local practices aimed at attracting investment, improve institutions and rules governing investment attraction and government awards and subsidies, and enhance transparency in the disclosure of investment-attraction information.

Third, we must address rat race competition through holistic measures

We should enhance law enforcement efforts to tackle monopolies and unfair competition, and strengthen compliance guidance and regulatory oversight concerning excessive low-price competition by enterprises. We should strengthen quality supervision and improve institutional frameworks for quality and safety risk management, random inspections, and defect recalls. We should also enhance source-based governance of product safety, as well as the assessment and monitoring of high-risk products, and improve traceability of key industrial products. We should strengthen integrated online and offline regulation, enhance capabilities for in-depth supervision, and intensify the efforts to regulate and rectify prominent violations such as the online sale of counterfeit and substandard goods. This will prevent low-price competition from undermining the market space for high-quality products. We should strengthen price regulation, fully leverage the self-regulatory functions of trade associations, guide enterprises to raise product quality while opposing low-quality, low-price offerings, and create a market order where high quality commands good prices and healthy competition prevails.

Fourth, we must ensure unified law enforcement in market regulation

We should strengthen the standardization and normalization of market regulation, clarify foundational and general regulatory rules, and build regulatory frameworks for new economic and business models. We should accelerate the unified application of administrative law enforcement standards, refine the standards for administrative discretion, standardize the exercise and management of discretionary authority, promote cross-regional alignment of enforcement criteria, and strengthen coordination between administrative law enforcement and judicial adjudication. We should reinforce community-level foundations, coordinate regulatory personnel and law enforcement resources, and explore the stratified and tiered optimization of how different functions are assigned, and how authority and responsibilities are divided, within market regulation. In order to adapt to evolving market trends, we should innovate regulatory methods and accelerate coordinated law enforcement across departments and regions. We should advance an integrated approach grounded in the rule of law, credit-based regulation, and intelligent supervision, while enhancing technical capabilities and institutional support for regulatory systems.

Fifth, we must work to cut logistics costs throughout society

We should establish well-aligned distribution rules and standards and improve standards in key areas such as the multi-modal transportation. We should pursue higher standards in shipping and distribution connectivity, promote digitalization and intelligent upgrading of offline commodity distribution, strengthen cross-regional regulatory coordination and mutual recognition frameworks, and address obstacles to smooth circulation of goods, such as data silos and inconsistent documentation standards. Furthermore, we should reform the integrated transportation system, address critical bottlenecks in key areas, including shifting freight from highways to railways, developing inland waterways, and enhancing the international logistics system, and improve the organization and efficiency of logistics operations. We must promote the integrated development of domestic and foreign trade, ensuring that the relevant regulations, systems, standards, and certifications are aligned across both. We should ensure that products sold domestically are produced on the same production lines, meet the same standards, and are of the same quality as those exported. We should expand and streamline channels for the domestic sale of export products, while reducing government-imposed transaction costs incurred by enterprises transitioning between domestic and international markets.

Sixth, we must further mobilize all sectors to proactively contribute to the development of a unified national market

We should optimize comprehensive performance evaluations of high-quality development and improve the system for assessing officials’ performance, ensuring precise and targeted application of assessment systems. We must further integrate and strengthen systems for fair competition reviews, providing positive incentives and binding constraints, and incorporate these reviews into the performance evaluation systems for law-based government administration and business environment optimization. To facilitate the development of a unified market, we should improve the statistical, fiscal, tax, and evaluation systems, and establish a fiscal relationship between the central and local governments featuring well-defined powers and responsibilities and the appropriate allocation of resources, achieving an optimum balance between regions. We will gradually transition to statistics collection based on where market entities conduct business, optimizing profit sharing between corporate headquarters and branches, as well as between places of production and consumption.

(Originally appeared in Qiushi Journal, Chinese edition, No. 23, 2025)