State Council Released Opinions On Promoting Fair Competition And Maintaining Regular Order In The Market

The State Council has released the Several Opinions on Promoting Fair Competition and Maintaining Regular Order in the Market (the "Opinions") (in Chinese, "关于促进市场公平竞争维护市场正常秩序的若干意见") on July 8, 2014.

Introduction

The Opinions put forward nine articles of guidelines: general requirements; broadening market access; strengthening market supervision; establishing credit basis for market supervision; improving supervision and enforcement; innovating enforcement systems; complete social supervision mechanism; complete security for supervision and enforcement and improving leadership. The purpose of the Opinions is to establish a more mature and fixed market supervision system by 2020.

Opinions

The brief contents of the Opinions are as follows:

  1. General Requirements

    The Opinions also set forth five basic principles for promoting fair competition and maintaining regular order in the market: simplifying policies and delegating power to the lower levels; supervision according to the law; equity and transparency; integration of power and responsibility; and coordinating governance and social power.

  2. Broadening Market Access

    The Opinions prohibit governments from restricting market operators to investment in commercial sectors, which are not prohibited by laws or regulations, and such investment or operation shall not cause damages to third party, public interests and national security.

    The Opinions point out, specifically, that market access should be broadened in five aspects: innovating the market access system; making more effort to reduce administrative examination and approval items; prohibiting examination and approval in disguised form; breaking regional protections and trade monopolies; and improving the market exit mechanism.

    1. Innovating the Market Access System. (i) All kinds of market operators shall have the right to enter into any industries, sectors or businesses which are not prohibited by the State Council explicitly. Local governments may adjust the law to allow entry into such prohibited industries, sectors or business, but such adjustment shall be approved by the State Council through provincial governments.

      (ii) MOFCOM shall reform the registration system to make it more simplified. The number of items requiring government approvals in advance shall be reduced.

      (iii) The local governments above county level may implement new methods to shorten the registration period and issue a comprehensive certificate instead of Business...

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