China’s “National Unified Market” Initiative: 2025 Update
China’s national unified market initiative, launched in 2022, aims to dismantle local protectionism and market segmentation across various sectors. The initiative focuses on implementing nationwide standards and regulations while integrating infrastructure across regions to boost market efficiency. The recently released Guidelines lay out concrete requirements for achieving these objectives by 2025 and beyond. Key highlights include the prohibition of unfair local tax incentives and the removal of hukou restrictions for participation in social insurance, among other significant measures.
On January 7, 2024, the National Development and Reform Commission issued the Guidelines for the Development of a Unified and Large Market (for Trial Implementation). These guidelines call for strengthening the uniformity of market infrastructure rules, accelerating the development of a unified capital market, and making efforts to eliminate local protectionism and market segmentation.
The “National Unified Market” is one of China’s most ambitious economic initiatives, aimed at creating a more standardized, efficient, and fair domestic market. On April 10, 2022, the Central Committee of the Communist Party of China (CCCPC) and the State Council jointly released the Opinions on Accelerating the Construction of the National Unified Market (the “opinions”). This document outlines the creation of a “national unified market” to improve standardization and consistency in the implementation of regulations across a wide range of industries in China.
This article provides an overview of the National Unified Market guidelines in 2025, examining the specific regulatory goals, industry-focused standards, and the implications for foreign investors operating in China.
Background
The concept of the National Unified Market was first proposed in China’s 14th Five-Year Plan (2021-2025) as a cornerstone of the country’s “dual circulation” strategy. This strategy aims to spur domestic demand (internal circulation) while developing conditions to facilitate foreign investment and boost production for exports (external circulation).
Historically, China’s fragmented market structure, marked by provincial protectionism and inconsistent regulations, hindered domestic consumption and economic integration. For instance, provincial governments often imposed barriers to favor local companies, leading to varying standards across regions. By addressing these issues, the National Unified Market seeks to create a unified market where fair competition prevails and businesses, both domestic and foreign, can thrive under consistent regulations.
National Unified Market 2025: Goals and key highlights
Strengthening the uniformity of market rules
One of the National Unified Market’s central objectives is to establish consistent regulatory frameworks across China. This includes enhancing intellectual property (IP) protections, implementing robust anti-monopoly regulations, and creating uniform industry standards. Specific regulations in the 2025 update include:
- Improving the unified property rights protection system: Relevant departments should continuously enhance the legal framework for equal and long-term protection of property rights across all ownership types. This includes refining standardized enforcement measures, unifying administrative enforcement standards, and aligning them with judicial standards. Local authorities must not unlawfully interfere in economic disputes or infringe on business entities’ rights using administrative or criminal means. They must avoid exceeding their authority in seizing, detaining, or freezing business assets and prevent profit-driven enforcement activities.
- Implementing a unified market access system: All regions and departments must strictly implement the “one national list” management model, including all locally established market access measures in the national unified negative list. Regions should conduct comprehensive evaluations of market access efficiency, ensuring transparency and objectivity in the evaluation process.
- Maintaining a unified fair competition system: All regions and departments must strictly implement the Fair Competition Review System, following legal procedures and standards to prevent policies that hinder fair competition. Regions and departments must not draft laws, regulations, or policies affecting economic activities without fair competition review or in violation of review standards.
- Establishing a unified social credit system: Relevant departments should improve a unified, standardized, and efficient credit repair system, enhancing collaboration among departments and third-party credit service agencies. Regions should ensure administrative agencies honor contracts with business entities and record any breaches in the relevant credit records, incorporating these records into government performance evaluations.
Creating a unified market for production factors and resources
The 2025 Guidelines focuses on creating a unified market for factors and resources in China. It emphasizes the market-oriented allocation of urban and rural land, the establishment of a unified labor market, and the development of a unified capital market. Additionally, it promotes the integration of technology and data markets and the creation of a national unified energy market system:
- Building a unified urban-rural construction land market: Relevant departments should promote the market-oriented allocation of urban and rural land elements according to national spatial planning. This includes exploring coordinated allocation of construction land quotas within urban agglomerations and metropolitan areas, and advancing the reform of rural collective operational construction land entering the market.
- Establishing a unified labor market: Relevant departments should establish a unified and standardized human resources market system, improve public employment services, build a national employment service platform, and establish a unified national social insurance service platform. They should also remove household registration restrictions for social insurance participation and improve policies for transferring and continuing social insurance relationships. Regions must not set policy barriers affecting talent mobility based on household registration, region, identity, archives, or personnel relations, promoting the rational flow and effective allocation of talent resources.
- Accelerating the development of a unified capital market: Relevant departments should strengthen financial infrastructure construction and regulatory coordination, accelerate the formulation of financial infrastructure supervision regulations, and unify financial market registration, custody, and settlement rules. They should also promote the alignment and standardization of regional equity market rules.
- Cultivating a national integrated technology and data market: Relevant departments should promote the construction of a unified, interconnected national technology trading market, enhance cross-regional transaction information sharing, and improve technology-capital docking platforms. They should also accelerate the establishment of unified data resource registration rules, create national standards for data trading and security, and establish a data element income distribution system.
- Building a national unified energy market system: Relevant departments should establish rules and systems for a unified national electricity market, clarifying transaction rules and ensuring alignment with regional needs. They should also establish a unified oil and gas market system that promotes fair access to infrastructure and optimizes resource allocation.
Promoting fair and unified market regulation
The guidelines also focuses on promoting fair and unified market regulation in China. It emphasizes the establishment of standardized regulatory rules, the integration of enforcement systems, and the enhancement of comprehensive market regulation capabilities. Key initiatives include issuing guidelines for administrative penalty discretion, integrating “Internet + Regulation” systems, and strengthening cross-regional regulatory coordination to ensure consistent and effective market oversight. Specific measures include:
- Establishing unified market regulation rules: Relevant departments and regions should issue guidelines for administrative penalty discretion, standardizing regulatory rules and clearly defining specific quantitative standards. They should also guide regions in formulating lists of penalties that can be exempted, reduced, or increased, specifying factors for determining applicable situations.
- Strengthening unified market regulation enforcement: Regions should integrate “Internet + Regulation” systems and random inspection systems, clarifying the responsibilities of regulatory, industry, and comprehensive enforcement departments. Regions with the capacity should enhance full-process supervision of enforcement inspections, promoting the use of enterprise QR codes for real-time inspection and penalty information.
- Enhancing comprehensive market regulation capabilities: Regions should establish network transaction regulation rules, enhancing collaboration between government departments and internet platforms, and sharing monitoring results and case clues. Regions are encouraged to strengthen cross-regional regulatory coordination, promoting integrated market regulation and sharing information among various departments.
Regulating improper market competition and intervention
This chapter focuses on further regulating improper market competition and intervention behaviors. It aims to eliminate local protectionism and market segmentation, ensuring a fair and unified market environment across regions. Special measures to eliminate local protectionism and market segmentation include:
- Regions must not restrict the free flow of goods and factors across regions or set unreasonable conditions that exclude or limit local business entities from providing goods and services to other regions. They must not use targeted subsidies or local recommendation lists to protect local products or restrict external products from entering the local market.
- Regions must not hinder the equal access, exit, or relocation of business entities, nor impose registration or certification barriers that obstruct cross-regional operations.
- Regions must not force business entities to register locally, establish subsidiaries, branches, or other entities, or set conditions such as local registration, industrial matching, or investment inclusion in statistics as prerequisites for applying for support policies, conducting business, or receiving subsidies. They must not set discriminatory bidding conditions during land transfers.
- Regions and departments must not unlawfully restrict or designate specific patents, trademarks, brands, components, origins, or suppliers in bidding and procurement processes. They must not set qualifications, technical, or business conditions that do not match the specific characteristics and actual needs of the procurement project, nor restrict bidders based on location, organization form, or ownership type.
- Regions must not implement preferential policies for investment promotion that violate national regulations on finance, taxes, prices, land, or environmental resources.
How will the National Unified Market 2025 impact foreign investors in China?
The National Unified Market 2025 update offers foreign investors both opportunities and challenges as China’s market becomes more unified and standardized.
The National Unified Market requirements in China presents several opportunities and challenges for foreign businesses. On the opportunities side, it simplifies market entry by reducing bureaucratic hurdles and increasing transparency, making it easier for foreign businesses to establish operations in China. Additionally, standardized laws and consistent enforcement across provinces enhance regulatory predictability, lowering risks associated with regional discrepancies. By breaking down local protectionism, foreign companies can now access a larger, more integrated national market.
However, there are also challenges to consider. Foreign businesses must comply with new, stricter quality and sustainability standards, particularly in sectors like manufacturing and technology. Furthermore, domestic companies, now operating under unified regulations, may become stronger competitors in industries that were previously dominated by foreign players.
Conclusion
The National Unified Market 2025 update is poised to redefine China’s economic landscape by fostering a unified, efficient, and fair market environment. For foreign investors, it presents a unique opportunity to engage with China’s vast consumer base under a more predictable regulatory framework.
As the National Unified Market progresses, businesses, policymakers, and investors must stay attuned to its developments and actively contribute to its successful implementation. This unified market not only aligns with China’s long-term vision but also holds the potential to reshape global trade dynamics.
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Dezan Shira & Associates assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Haikou, Zhongshan, Shenzhen, and Hong Kong. We also have offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Dubai (UAE) and partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh, and Australia. For assistance in China, please contact the firm at china@dezshira.com or visit our website at www.dezshira.com.
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