China's new regulations on fair competition reviews came into force on Thursday, filling the legislative gap in the field.

Although China founded its fair competition review mechanism in 2016, some local protectionism and market segmentation behaviors have not been completely addressed, which has hindered the free flow of production factors and reduced the efficiency of resource allocation and economic operations.

Administrative agencies and organizations legally authorized to manage public affairs must conduct fair competition reviews when formulating laws, rules and policies related to business activities, according to the new regulations that allocate duties to both central and local government departments.

The regulations outline specific standards for fair competition reviews. For instance, there are measures to restrict market entry or exit, while the free flow of goods and business operations are not to be constrained by any policy measures. The regulations also stress that stakeholders and public opinion should be taken into account during reviews to safeguard their interests.

The move is conducive to accelerating the elimination of regulations and practices that impede the formation of a unified market. It will help ensure that all types of enterprises can participate in fair competition and better protect the legitimate rights and interests of all business entities.

Strengthening fair competition review is a powerful tool for cultivating and developing new quality productive forces, which should be jointly cultivated by both the "visible hand" of the government and the "invisible hand" of the market.

The regulations provide a strong institutional guarantee for fair competition and the innovative development of business entities, which is conducive to giving full play to the innovation incentivizing and survival of the fittest functions of the market competition mechanism, guiding the effective allocation of innovative resources through market demand, and allowing various advanced and high-quality production factors to flow smoothly.

The regulations, if strictly implemented, can help tighten the "institutional cage" for the abuse of administrative power and curtail improper interference in fair market competition.

The implementation of the regulations represents the country's latest efforts to prioritize the establishment of a unified national market characterized by high efficiency, standardization, openness, and fair competition in a bid to form a new development paradigm.

ECONOMIC DAILY