China's state planner urges local governments to increase cross-regional market connectivity

China’s state economic planner asked all local governments to act under the same standards to eliminate cross-regional restrictions in market entry, aiming to break walls amid the economic slowdown.

The National Development and Reform Commission released a trial about “Guidelines for the Construction of a National Unified Market” in a briefing on Tuesday.

Among the proposed measures, NDRC urged all regional governments not to use administrative and criminal means to intervene in economic disputes and shall not carry out law enforcement or exercise jurisdiction outside of their administrations, which would violate the law.

The cross-regional fines emerged at the end of last year in mainland China, and are regarded as a way for local governments to increase their income amid economic downturns.

The NDRC has also requested that local governments should not restrict the free flow of commodities and production factors across regions, and should not set unreasonable limitations to exclude, restrict or prohibit local business entities from supplying commodities and services to other regions. 

The local governments should also refrain from strengthening the protection of local products or specific products in the form of targeted subsidies, local recommendation catalogs, etc., as well as restricting the entry of products from other areas into the local market.

 The NDRC also proposed to accelerate the development of a unified capital market and to strengthen information sharing with capital market-related institutions and interconnection with bank credit information.

(Themis Qi)