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The following OECD assessment and recommendations summarise chapter 4 of the Economic Survey of China published on 2 February 2010.
Product market competition has intensified but further regulatory reform is called for
Over three decades of liberalisation, including accession to the World Trade Organisation in 2001, China’s product markets have become increasingly competitive and market forces are now generally the main determinant of price formation and economic behaviour. A competition policy framework has been established and regulation of firm entry and exit has improved. Administrative reforms have enhanced the capacity of the central government to oversee a market economy and regulation has become less reliant on microeconomic interventions and more focused on framework conditions, even though industrial policy is being stepped up in the context of the global economic crisis, in the form of ten sectoral plans. Moreover, the first vintage of the OECD’s indicators of the extent of government intervention in products markets in China indicate that government intervention remains pervasive, both in absolute and relative terms, and is on a par with that in Russia. This may constrain growth more and more as the economy continues to develop. Loosening the traditional links between state-owned enterprises and the government is an ongoing challenge and one that can be best achieved by further reducing the size of the state sector, especially amongst the smaller public-sector companies. Reducing administrative burdens, making room for more private sector involvement in network sectors and lowering barriers to foreign direct investment in services would also spur competition and productivity growth going forward.
The overall indicator of product market regulation (2008)
The indicator score runs from 0 to 6, representing the least to most restrictive regulatory regime
How to obtain this publication
The complete edition of the Economic Survey of China is available from:
The Policy Brief (pdf format) can be downloaded in English. It contains the OECD assessment and recommendations.
For further information please contact the China Desk at the OECD Economics Department at email@example.com.
The OECD Secretariat's report was prepared by Richard Herd, Samuel Hill and Yu-Wei Hu under the supervision of Vincent Koen. Research assistance was provided by Thomas Chalaux.