The absence of an adequate legal system, as well as a lax crackdown on irregularities and the illegal protection of locals, has led to the current market disorder, according to China's top legislators, who pledged to take measures to put the market back on track.
The disorder is highlighted by rampant counterfeit sales, debt evasion, smuggling, tax frauds and accounts forges, on which Premier Zhu Rongji urged to rigorously crack down at the Fifth Session of the Ninth National People's Congress (NPC).
The efforts to discipline the market is high on the government's agenda, partly to meet the requirements of the World Trade Organization (WTO), which China joined in December.
Chen Dequan, an NPC deputy from Central China's Hunan Province, said the government should institute a complete legal framework to reinforce the crackdown on irregularities.
"An imperfect market regulation framework has fuelled the market disorder," said Chen, also the director of the economic and trade commission of Hunan Province.
Sometimes local authorities have to drop their line of litigation even after they arrest suspected criminals making counterfeit goods or false accounts, because no relevant law applies. Other times, the punishment is too mild to prevent fellow criminals, Chen added.
Premier Zhu promised last week to strengthen law enforcement, perfect the regulations, and firmly crack down on such crimes that disturb the national economy.
Zhu also urged the nation to set up a credit system to "let those with bad records of behavior pay the price; even bring them to book."
However, Qin Chijiang, an NPC deputy from Northeast China's Heilongjiang Province, said, when regulating the market, the government should discipline itself to supervise the market.
"The government should honor its credit," said Qin, the deputy secretary-general of the Financial Association of China.
Local governments sometimes fail to fulfill their investment promises, leading to chained debts or bad assets, Qin said.
The government should supervise the market within the legal framework, instead of directly interfering in the market with their administrative power, he added.
Chen said the central government should also work on breaking down local protection over illegalities to create a fair competitive market.
For instance, because of local protection, some dangerous illegal small coal mines could still resume production after being ordered to close down, leading to serious gas explosion accidents.
Governments at all levels should be well aware of the significance of the normalization of the market order, and work together to keep the order, Chen said.
(China Daily March 12, 2002)
