On August 21, 2024, the General Office of the CPC Central Committee and the State Council have jointly released a policy document named the Opinions on Improving the Market Access System (hereinafter referred to as “the Opinions”) aimed at enhancing the market access system in China, a critical element of the country's socialist market economy.
These Opinions outline a series of measures intended to break down market barriers, streamline access procedures, and create a more open, transparent, and equitable business environment. Key Points of the Opinions include:
- Optimization of the Negative List Management Model: The Opinions call for the integration of all market access management measures into a unified national negative list. This list will encompass all laws, regulations, and policies that impose market entry restrictions. The aim is to ensure that only those activities explicitly mentioned in the negative list require special permits or are subject to restrictions. The negative list will be dynamically adjusted, and its contents will be fully disclosed to the public.
- Scientific Determination of Market Access Rules: The Opinions advocate for a broad access threshold combined with stringent post-access regulation, particularly in fully competitive sectors. In areas critical to national security and the economy, stricter access controls will be maintained. The financial sector will see strengthened regulatory oversight to prevent monopolistic practices.
- Reasonable Market Entry Prohibitions and Permits: Specific prohibitions on market entry will be established in sectors where management is necessary, with clear guidelines on licensing and qualifications. All such information will be made public, and unauthorized market entry will face strict penalties.
- Coordination of Domestic and Foreign Investment Policies: The Opinions emphasize the need for harmonized policies between domestic and foreign investments, ensuring that any relaxation of market access for foreign entities is matched by similar adjustments for domestic businesses. Pilot regions like the Hainan Free Trade Port will explore new models of coordinated market access.
- Easing Restrictions in Service Sectors: Access restrictions in non-sensitive service sectors will be gradually removed, particularly in education, healthcare, and sports. Administrative barriers will be reduced to encourage cross-regional business operations, fostering a more competitive and innovative service sector.
- Facilitation of Market Access for New Business Sectors: The Opinions highlight the need to develop market access systems for emerging industries such as deep-sea exploration, aerospace, artificial intelligence, and new energy. These sectors will benefit from tailored policies to promote innovation and the application of advanced technologies.
- Piloting and Expanding Market Access in Strategic Regions: Pilot projects will be launched in key regions to test the easing of market access thresholds. Successful models may be replicated across other regions to drive national growth in strategic industries.
- Strengthened Implementation and Supervision: The Opinions call for a comprehensive evaluation of the market access system's effectiveness, with third-party institutions playing a key role. Violations of market access regulations will be monitored and publicly disclosed through national credit platforms.
The Opinions represent a significant step toward creating a more streamlined and equitable market environment in China, with a strong emphasis on fostering innovation and ensuring fair competition across all sectors. For enterprises, it is advised to familiarize themselves with the updated negative list and assess their market strategies accordingly. Particularly, businesses in emerging sectors should actively engage with pilot projects to leverage new opportunities.
For investors, both domestic and foreign investors are encouraged to explore opportunities in regions where pilot programs are being rolled out. Understanding the evolving regulatory environment will be crucial for making informed investment decisions.
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