Bigger role for market in input allocation

China published a guideline on Thursday on improving the market-based allocation of production factors in a bid to further facilitate their free and orderly flow and stimulate market vitality.

Efforts will be made to further deepen reform and opening-up and remove institutional barriers that hinder the free flow of production factors to lay a solid foundation for high-quality development and the building of a modern economic system, according to the document, issued by the Communist Party of China Central Committee and the State Council.

China will promote market-based allocation of production factors, including land, labor and capital, while accelerating the development of factors such as technology and data, it said.

The country will push forward with reform of the rural land expropriation system, adjust policies on industrial land use and optimize its land management mechanism.

To further promote the flow of workers, it will take more steps to advance household registration system reforms, guarantee the equal employment rights of both urban and rural workers and strengthen vocational skills training.

To advance the market-based allocation of capital factors, the document said China will improve basic stock market mechanisms, accelerate the development of the bond market, increase the supply of effective financial services and expand financial opening-up.

Access requirements for foreign-funded financial institutions will be gradually relaxed and domestic agencies will be encouraged to participate in trading on the global financial market, it said.

The document underlined the importance of better protection and application of intellectual property rights and support for the marketization of independent IPRs in fields such as major equipment and key new materials while encouraging the integrated development of the factors of technology and capital.

Efforts will be made to nurture new industries, businesses and models in the digital economy and support the utilization of data in fields including agriculture, industry, transport, education and urban management.

Market-oriented pricing mechanisms and trading platforms for production factors should be further optimized, according to the guideline.

It also urged the creation of a better environment for reforms by further cutting red tape and phasing out regulations and practices that hinder fair competition.