The State Council demanded that local governments stop blocking the
sale of goods and services from other parts of China in their
regions in an effort to end regional protectionism.
In
a sweeping new regulation released Monday, the State Council banned
any governmental division from undermining fair competition by
restricting the access to their local markets.
Regional protectionism has long been blamed for economic
inefficiencies and investment disincentives in China, experts
said.
In
some cases, local governments allow small, pollution-spewing firms
to churn out resource-depleting or fake goods rather than allow
better quality products to be traded, they said.
“Regional protectionism runs against the country’s effort to build
a unified, fair and orderly market system,” said Han Xiaoming, an
economics professor at the Renmin University of China in Beijing.
“Its existence is detrimental to the improvement of overall
performance of the national economy.”
The State Council document, signed by Premier Zhu Rongji last week,
prescribed that no local government agencies can specify that their
enterprises and consumers have exclusive access to the local
market.
It
also said that no barriers should be erected on roads, at bus or
railway stations and at ports to deny the entry of products
produced by companies in other regions.
Local governments also may no longer impose discriminative
measures, such as different inspection and technical standards or
pricing rules to thwart outside companies, it said.
Furthermore, local officials won’t be permitted to restrict or
exclude enterprises of outside regions from investing or
establishing branches in their regions.
The document said local governments and related departments should
assume the responsibility of stopping these practices. Enterprises
and investors can counteract the now-outlawed practices by
reporting complaints to the province or the State Council.
The move should motivate local firms to improve their products and
their business structures to become more competitive, Han said.
(People’s Daily 05/01/2001)