Unified market to also open doors for foreign firms

The central authorities' recent official document to accelerate the construction of a national unified market said it is necessary to expedite the establishment of a unified national market system and rules, eliminate protectionism and market segmentation, clear the bottlenecks restricting the economic cycle, promote the smooth flow of commodity factors and resources on a larger scale, and accelerate the construction of an efficient, standardized, fair, and fully open national unified market.

The document evoked a positive response at home and abroad, because a unified market will allow market entities including foreign-funded enterprises to cash in on the huge development opportunities.

First, the unification of market system rules, and strict regulation of improper market competition and market intervention will give foreign-funded enterprises greater market access.

Although China has established basic market system rules, strengthened property rights protection, but in some regions and sectors there is non-uniform market access. In addition, some regions need to erase local protectionism and the segmentation of the domestic market, and treat the foreign-funded enterprises more equally in terms of qualification certification, business licensing, bidding and procurement.

To this end, the document makes "strengthening the unification of basic market systems and rules" the primary task, and promises to improve property rights protection, market access, fair competition and social credit. It also seeks to abolish policies that inhibit the unification of the market and hinder fair competition, as well as do away with policies that may have discriminated against foreign-funded and non-local enterprises.

The implementation of the document's recommendations will ensure the uniformity of policies, consistency of rules and proper coordination across the country, which in turn will help develop a market- and law-based business environment, and enable foreign-funded enterprises to get greater market access.

Second, promoting the high-level unification of products and services will help increase the market scale and provide a broad market space for foreign-funded enterprises. China has the largest middle-income group in the world, and its per capita disposable income in 2021 reached 35,128 yuan ($5,244). Also, the total retail sales of consumer goods reached 44.08 trillion yuan, up 12.5 percent year-on-year, reflecting China's strong domestic consumption power.

Besides, domestic consumption is more focused on the improvement of product quality rather than quantity, service consumption instead of simple commodity consumption, and customization and diversification rather than imitation. As a result, new formats, new models and new scenarios of consumption have been emerging.

According to the document, to meet the people's higher demand for safety and quality of products and services, it is necessary to improve the standard and measurement systems, as well as the quality of services, apart from optimizing the consumption environment, enhancing consumer confidence, and releasing the potential demand.

Plus, a unified national market will not only add to the advantages of a super-large domestic market but also help foreign-funded enterprises to acquire more market space.

Third, a highly efficient and smooth domestic market will create favorable conditions for foreign companies to optimize their supply chains and sharpen their competitive edge. Due to the bottlenecks hindering the flow of domestic commodities, the logistics and transaction costs for the whole society remain high, and the supply chain management capability of foreign-funded enterprises is restricted.

It is important to build a unified national market because it will facilitate the efficient and smooth expansion of the domestic market by promoting high-standard connectivity of market facilities and creating a national market for factors and resources. Which will reduce the transaction costs, smooth the production and exchange process of enterprises, and increase the flow of production factors in the domestic market, while creating favorable conditions for foreign-funded enterprises to optimize their supply chains 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, with digital construction, commodity quality system, and standard measurement system construction being areas in which enterprises can play important roles.

In addition, the construction of a dedicated energy market and an ecological 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 views don't necessarily represent those of China Daily.

The author is an associate professor of international trade at the School of Economics, Capital University of Economics and Business.