The National Development and Reform Commission (NDRC) has issued its seventh report on cases involving breaches of the Market Access Negative List, reinforcing the government’s commitment to eliminating local market access barriers and fostering an open, competitive environment. The report highlights ten cases where local governments had introduced unlawful restrictions, ranging from mandatory local registration to setting discriminatory conditions for specific industries. Each case reflects an ongoing effort to standardize market practices and uphold the principles of fair competition, aligning with China’s broader economic reforms.
Overview of the Market Access Negative List
China’s Market Access Negative List specifies industries, fields, and businesses where investment or participation is either restricted or prohibited for certain entities. Its goal is to remove unwarranted entry barriers, allowing for open competition in unrestricted markets. The Negative List serves as a critical policy tool to eliminate “hidden” local protectionism and ensure that domestic and foreign businesses can operate on an equal footing within China. In recent years, enforcement has become more robust, with strict corrective measures for non-compliant regions.
Key Cases and Resolutions
- Fujian Province: Simplified Bidding Process in Hui’an County
Hui’an County’s government had previously enforced local registration requirements for companies bidding on small-scale construction projects, restricting outside businesses from fair participation. This policy limited bidding to local companies, discouraging broader competition. Following scrutiny, the government rescinded this restriction in May 2023, aligning bidding processes with national regulations to facilitate open competition.
- Zhangzhou and Longyan Counties: Barriers in the Hospitality Sector
Both Zhangzhou’s Nanping County and Longyan’s Changting County had required excessive pre-approvals for B&B operators, imposing high regulatory barriers. Nanping mandated that B&B operators obtain approval from a special county committee before business registration, while Longyan required B&Bs to engage third-party entities for safety assessments, even though this certification was no longer a national requirement. The counties removed these restrictions in late 2023, allowing B&B operators to proceed directly with registration and standard safety checks, a significant step toward reducing entry barriers in the hospitality industry.
- Pingtan Comprehensive Experimental Zone: Renewable Energy Access
In the Pingtan Experimental Zone, local regulations had previously mandated that renewable energy projects include local state-owned enterprises as shareholders, with a minimum of 20% ownership. This stipulation created barriers for private companies entering the clean energy sector. In August 2023, Pingtan removed this requirement, fostering a more inclusive investment environment and encouraging private-sector participation in wind energy projects.
- Chuxiong, Yunnan Province: Equal Access to Electric Vehicle Charging Infrastructure
In Chuxiong’s High-Tech Development Zone, authorities had previously assigned electric vehicle (EV) charging station construction solely to state-owned enterprises (SOEs), which prevented private enterprises from participating. By October 2023, the local administration had revoked this exclusive right, inviting multiple companies to provide EV infrastructure and restoring competitive access in line with national market access guidelines.
- Shared Mobility Regulations in Sichuan
In both Luojiang District and Huaying City, local governments had imposed restrictive conditions on shared bike providers, mandating local business registration and office setups as preconditions for market entry. Such requirements limited the ability of external companies to operate in these areas. Authorities in both districts withdrew these restrictions in mid-2023, enabling a more open shared mobility market.
- Other Notable Cases and Rectifications
- Medical Service Monopolies in Gansu: Local health authorities had designated specific hospitals for health examinations of food industry workers, restricting service providers and disadvantaging private healthcare providers. The government has since removed these designations, reinstating competition.
- Automobile Inspection Barriers in Xishuangbanna: Unnecessary documentation for motor vehicle inspection centers was initially required, burdening businesses. Following the NDRC’s directive, this precondition was removed, restoring access for all qualified providers.
Implications for Businesses and Economic Policy
The measures described in the NDRC’s report reflect China’s commitment to breaking down artificial barriers that local authorities have set up over the years. By ensuring a level playing field, these actions help attract investment, boost competition, and enhance consumer choice. Additionally, the emphasis on compliance with the Market Access Negative List is a step toward more transparent governance at the local level, sending a strong signal that non-compliance will be met with swift corrective action.
These changes are particularly impactful for industries like renewable energy, construction, hospitality, and EV infrastructure, which are seeing increased interest from both domestic and international investors. By encouraging open competition, China aligns itself with global business standards, appealing to a broad base of investors and fostering a healthy, inclusive economic environment.
Looking Ahead
As China continues its journey of economic reform, the enforcement of the Market Access Negative List represents a vital pillar of its open-market strategy. By addressing these localized issues, the NDRC’s actions provide a clear pathway for other regions to audit and adjust their regulations in line with national policy goals. Businesses, both local and international, can expect a more predictable regulatory landscape, as compliance mechanisms strengthen and market transparency improves.
China’s approach underscores its dedication to building a modern economic system where fair competition is central. The NDRC’s ongoing monitoring and transparent reporting on these cases emphasize the government’s commitment to aligning local practices with national economic policies, creating a favorable climate for sustainable economic growth.
