Circular of the State Council on Issuing the 13th Five-year Plan for Market Supervision

Circular of the State Council on Issuing the 13th Five-year Plan for Market Supervision
Circular of the State Council on Issuing the 13th Five-year Plan for Market Supervision

Guo Fa [2017] No.6

January 12, 2017

People's governments of all provinces, autonomous regions and municipalities directly under the Central Government, all ministries and commissions of the State Council and all institutions directly under the State Council,

The 13th Five-year Plan for Market Supervision is hereby issued to you for your implementation.

13th Five-year Plan for Market Supervision

The period of the 13th Five-year Plan is a crucial period for building a comprehensive well-off society and a key period for China's economic transformation and system improvement. The consolidation and improvement of market supervision are important directions of transformation of government functions, important guarantees for maintaining fair market competition and fully inspiring market vitalityand creativity as well as important tasks of the modernization of national governance system and governance capacity. The 13th Five-year Plan for Market Supervision (this "Plan"), as a comprehensive, basic and strategic plan for market supervision, emphasizes the comprehensive supervision over the market order and environment from perspectives of maintaining a national unified and large market, preserving fair market competition and safeguarding rights and interests of consumers, provides a concrete framework for market supervision, provides all the market players with a definite signal and stable expectation, and forms a market supervision pattern with division, collaboration, complementation of mutual advantages and mutual promotion of comprehensive supervision and professional supervision in industrial fields as well as social cooperative supervision.

Chapter I Plan Preparation Background

I. Effects and Problems of Market Supervision
Since the launching of the 12th Five-year Plan, especially the time of the 18th National Congress of the Communist Party of China (CPC), the Central Committee of the CPC and the State Council have attached great importance to the market supervision and have defined the market supervision as an important function of the government. All local authorities and departments have made arrangements for streamlining of administration and delegation of power to lower levels, the combination of delegating power and strengthening regulation and the reform of service optimization, have taken the reform of commercial systems as a breakthrough, and have made significant achievements in respect of the reform and innovation of the market supervision, boosting the mass entrepreneurship and innovation.
An outstanding progress has been made in the reform of commercial systems. government functions have been transformed, administrative examination and approval have been reduced, and the reforms of "license first, certificate second" and of industrial and commercial registration system have been impelled vigorously to address the difficult problems facing the investment and entrepreneurship of the public. The paid-in capital registration system has been replaced with the subscribed capital registration system to lower the capital threshold for starting up a business. The annual inspection system for enterprises has been replaced with the annual report and publicity system, strengthening the awareness of responsibility and credit of enterprises. The domicile (business place) registration of market players has been simplified, releasing domicile stock resources. The name registration reform has been conducted, and the electronic business license and whole-process electronic registration administration have been impelled, enhancing service efficiency. The reform of "integrating five certificates into one with a unified credit code" has been conducted, and relevant license and certificate integration has been propelled. With a rapid growth in the number of market players, China has become a country with the most market players in the world.
A new mechanism of market supervision has been established step by step. The ex ante examination and approval have been simplified, the interim and ex post supervision have been intensified, and a new mode of the market supervision has been explored. A new supervision mechanism centering on credit has been established, and the self-constraint function of enterprises has been consolidated. The enterprise information publicity system, the abnormal operation list system and the list system of seriously illegal and dishonest enterprises have been established, the supervision of "dual random and one publication" has been implemented, the information sharing and joint punishment mechanism has been established among government departments by virtue of the national credit information sharing platform, and the national enterprise credit information publicity system and the website of "CREDITCHINA.GOV.CN" have been constructed. Via credit supervision mechanism, information transparency has been enhanced, market transaction risks have been reduced, government supervision costs have been declined, and economic operation efficiency has been enhanced.
Preliminary achievements have been made in the reform of the market supervision system. In view of problems including overlapping powers and responsibilities and law enforcement by multiple agencies, the reform of administrative law enforcement system has been implemented, law enforcement bodies have been integrated, law enforcement powers have been centralized relatively, and comprehensive law enforcement has been promoted. All the places have been actively exploring comprehensive law enforcement reform, optimizing law enforcement resources, forming concerted efforts in supervision, and enhancing grassroots supervision efficiency. In the meantime, the principles that "whoever grants examination and approval shall also be responsible for supervision, and whoever is in charge shall also be responsible for supervision" have been established, and the supervision duties of industrial competent authorities have been specified.
The law and regulation system for the market supervision has been improved step by step. As per the requirements for comprehensively and lawfully ruling the country and building a law-based government, the legal construction of the market supervision has been intensified. The Company Law, the Law on the Protection of Consumer Rights and Interests, the Special Equipment Safety Law, the Trademark Law, the Advertising Law and so on have been formulated or revised, basically forming a relatively complete law and regulation system for the market supervision. The capability of consolidating the market supervision by virtue of the ideas and methods of rule of law has been enhancing.
Market order and environment have been improving. The main responsibilities of production operators have been consolidated, production, operation and transaction behaviors have been regulated lawfully, quality standard management has been reinforced, and the percent of pass of product quality supervision and spot check has been increasing. The quality and safety supervision for consumer goods, food and drugs has been reinforced, and the administration of the consumer goods has been achieved in the whole process from production to circulation. Consumption environment has been improving, and the protection of consumer rights and interests has reached a new level. The China Consumers Association and other types of consumer associations and organizations have been developing continuously, and have become important forces for safeguarding consumer rights and interests. Competition law enforcement has been improved and intensified, the law enforcement for anti-monopoly and anti-unfair competition has been reinforced, the supervision over market price behaviors has been reinforced, the supervision over new fields such as online market and e-commerce has been strengthened, supervision and examination have been conducted actively, pyramid sales have been cracked down upon and direct sales have been regulated, infringements upon intellectual property rights and the production and sales of forged and fake commodities have been cracked down upon, the product and service quality has been enhancing, and market economic order has been improving further.
At present, China is in the process of economic transformation and system improvement. Although outstanding effects have been made in market supervision, there are still some contradictions and problems in market order and environment. Especially, forged and fake commodities, false publicity, piracy and patent infringement, price violations, food and drug safety and other problems occur frequently, the awareness of main responsibilities of enterprises is not strong, and it is difficult for consumers to safeguard rights; incomplete market competition and excessive competition coexist, monopolistic phenomena and unfair competition occur from time to time, and particularly, industrial monopoly, local protection, market segmentation and other problems are relatively prominent; the market credit system is not sound, the consciousness of credit is weak, and all kinds of dishonest behaviors are common; industrial associations and intermediaries do not give full play to supervision and constraint roles, public supervision is relatively deficient, and the promotion of common social governance is insufficient; there are still many administrative examinations and approvals, many links and complicated procedures for the investment and entrepreneurship of the people, and market access threshold is relatively high; and, the transformation of government functions is not satisfactory, and market supervision system and mechanism cannot meet requirements of economic development, and so on. All of these problems affect roles of market mechanism, the optimal allocation of resources and the healthy development of China's economy.

II. Significances of Strengthening and Improving the Market Supervision
It is of significance that we strengthen and improve the market supervision in the important period of adjustments to global economic pattern and the rebuilding of competitive edges and during the key period of China's economic transformation and system improvement.
The consolidation and improvement of the market supervision are urgent demands for improving the socialist market economic system. Although China's socialist market economic system has been initially established , there are still many problems. Particularly, the market order is abnormal, and phenomena of seeking economic interests by improper means is widespread; the development of production factor market lags behind, and idle factors and the failure to meet a number of effective demands co-exist; market rules are not standardized, and departmental and local protectionism are widespread; and, market competition is insufficient, hindering the selection of the superior and the elimination of the inferior. If such problems are not solved, it will be difficult to form a perfect socialist market economic system. It is urgent to consolidate and improve the market supervision, and to break barriers to system improvement.
The consolidation and improvement of the market supervision are urgent demands to accelerate the transformation of government functions. In order to give play to the decisive role of market in resource allocation and the role of the government better, it is the key to deepen the reform of administrative system, transform government functions and innovate in government management following the direction of market-oriented reform. The government shall change its role of a development body into a body promoting development, reinforce the market supervision, and create a market environment with fair competition. Currently, market supervision tasks become increasingly heavy. The maintenance of the prosperous development of market economy through scientific and efficient market supervision is an objective requirement of the modernization of China's governance system and governance capacity, and an important direction of fulfillment of government functions under conditions of market economy.
The consolidation and improvement of the market supervision are urgent demands to promote the supply-side structural reform. To complete a series of tasks such as the resolving of excess capacity, elimination of "zombie enterprises" and cultivation of new industries and momentums, we urgently need to consolidate and improve the market supervision and give full play to market forces. Only by cracking down upon various forged and fake commodities and behaviors that infringe upon rights and interests of enterprises can we make market room for the development of credible enterprises. Only by promoting on of the selection of the superior and the elimination of the inferior and forming the market exit mechanism for "zombie enterprises" can we reduce the consumption of social resources and boost industrial transformation and upgrade. Only by encouraging competition and creating a market environment conducive to mass entrepreneurship and innovation can we provide new vitality for economic development. Only by launching the reform of policies and systems distorting market competition and eliminating local protectionism and administrative monopoly can we give full play to the advantages and potentials of China's unified and large market.
The consolidation and improvement of the market supervision are urgent demands to adapt to new trends of scientific and technological revolution and industrial transformation. A new round of scientific and technological revolution and industrial transformation represented by big data, cloud computing and so on have boosted the cross-cutting integration of technologies, resources, industries and markets across time and space as well as the continuous emerging of new industries, business types and modes including networked economy, sharing economy, maker spaces and online and offline interactions, and have subverted many traditional production and operation modes and consumption modes, which put forward new requirements and challenges for the market supervision. While the market economy develops prosperously, the market supervision shall keep pace with the times and be innovative. Only by continuously exploring a new mechanism of the market supervision can we better adapt to demands of development changes.
To sum up, we shall profoundly recognize new situation, tasks and challenges of China's market supervision in the period of the 13th Five-year Plan, strengthen the awareness of reform, consolidate innovation spirit, expand opening views, guide the market supervision by modern philosophies, arm the market supervision with modern science and technology, impel the market supervision by modern supervision methods, actively explore new modes of the market supervision with Chinese characteristics and meeting requirements of the times, and create a development environment with fair competition for various market players.

Chapter II General Thoughts

As per China's general arrangements in the period of the 13th Five-year Plan, accurately grasp the law of economic development and market supervision trend, stand from the present, look ahead to the future, make a plan as a whole, advance in order, give full play to the important role of the market supervision in the general situation of reform and development, and provide guarantees for the efficient operation of market economy.

I. Guidelines
We shall fully follow the guidance of the 18th National Congress of the CPC and the third, fourth, fifth and sixth plenary sessions of the 18th Central Committee of the CPC, put into practice the guiding principles from General Secretary Xi Jinping's series of important speeches and new philosophies, thoughts and strategies on country ruling and the administration of state affairs, carefully implement decisions and arrangements of the Central Committee of the CPC and the State Council, generally promote the general layout of the "Five in One" and collaboratively impel the strategic layout of "Four-pronged Comprehensive", firmly adhere to and carry out the concept of innovative, harmonious, green, open and sharing development, take the deepening of reform of commercial systems as a breakthrough, focus on the creation of a good market access environment, market competition environment and market consumption environment, establish the modern market supervision philosophies, reform market supervision system, innovate market regulation mechanism, intensify comprehensive market regulation, enhance the scientific base and effectiveness of market supervision, and boost the continuous and healthy economic and social development.
-- Inspire market vitality. The internal vitality of market economy is an important momentum of continuous economic growth and an important foundation for economic prosperity. Change the traditional idea of "supervision", take the inspiration of market vitality and creativity as important directions of the market supervision, deepen the reform of commercial systems, eliminate different institutional barriers, create a market environment conductive to the mass entrepreneurship and innovation, serve market players, and serve the overall situation of reform and development.
-- Regulate market order. A perfect market economy is vital and orderly. Without vitality, the market economy will lose vigor; without order, the market economy will lose guarantee. Take the regulation of market order and the maintenance of fair competition as important focuses of the market supervision, adhere to the combination of loosening of control and good administration with a view to loosening the control of market without disorder and maintain a dynamic and orderly market , and provide guarantees for the survival of superior enterprises and the elimination of inferior ones and the industrial transformation and upgrade.
-- Safeguard consumer rights and interests. It is the essential requirements of the shared development to protect consumer rights and interests and interests of the people. Establish the idea of consumer-oriented, put the maintenance of consumer rights and interests at the core place of the market supervision, and enhance the happiness and the sense of gain of the people. Take the consolidation of safeguarding consumer rights and the improvement of consumption environment as important measures for impelling the supply-side structural reform and achieving the focus on both supply and demand.
-- Enhance supervision efficiency. In order to enhance market operation efficiency, market supervision efficiency shall be enhanced. Strengthen cost consciousness, consolidate the concept of efficiency, take the enhancement of the supervision efficiency as a basic requirement for the market supervision, change traditional unlimited supervision concept, reform the traditional onerous method of extensive man-to-man supervision, and boost the reform and innovation of the market supervision.
-- Intensify global views. In the process of economic globalization, market supervision concepts and modes have become important factors influencing national competitiveness and international influence. Adapt to the globalization tendency of China's economic development, and as per the requirement for enhancing China's institutional voice in global governance, review the formulation of market supervision rules and market supervision law enforcement effects from an international perspective, and keep enhancing the international level of the market supervision.

II. Major Objectives
By 2020, according to requirements for building a comprehensive well-off society and improving the socialist market economic system, we shall focus on building up a unified, open, competitive and orderly, law-biding modern market system with effective regulation improve the framework of commercial systems, perfect the system of competition policies, initially form a scientific and efficient market supervision system, establish a new market supervision pattern with the rule of law as basis and the self-discipline of enterprises and social common governance as supports, form a market environment conductive to entrepreneurship and innovation, trustworthiness and law observation and fair competition, and form a convenient, international and law-based business environment. Specifically,
-- A loose and convenient market access environment will be established basically. A market access system shall have been further improved, and fair, unified, open and transparent market access rules will be formed basically. Various administrative examinations and approvals will be cut down greatly, the ex ante and ex post examination and approval matters of commercial registration will be reduced significantly, and different unnecessary licenses and certificates will be eliminated. The time for investment in an enterprise of will be cut down, new market players will be growing and developing actively, the life cycle of newly established enterprises will be extended, and enterprises with more than 1,000 employees will be increased remarkably.
-- A fair and orderly market competition environment will be formed basically. National unified market supervision rules will be formed basically, supervision by multiple agencies and repeated law enforcement will be eliminated basically, and a national unified and large market will be further improved. Anti-monopoly and anti-unfair competition law enforcement will achieve significant effects, infringements and counterfeit behaviors, local protectionism and industrial monopoly will be controlled effectively, a mechanism for fair competition and the selection of the superior and the elimination of the inferior will be established basically, the market order will be improved noticeably, the roles of trademarks and brands will be given full play, and the quality of market players will be enhanced largely.
-- A safe and secure market environment for consumption will be established basically. A legal system for safeguarding consumption rights will be improved further, and a mechanism for safeguarding consumption rights will be perfected further. A nationwide unified consumer complaint and report network platform will be formed basically, and the convenience in safeguarding consumption rights will be enhanced significantly. Consumer associations and other consumer organizations will be developed and expanded, and the socialization level of safeguarding consumption rights will be enhanced largely. The consumption quality and safety of commodities and services will be enhanced in an all-round way, and consumption satisfaction will be enhanced continuously.
-- An authoritative and efficient market supervision system and mechanism will be established basically. The reform of a comprehensive law enforcement system for the market supervision will be completed fully, a market supervision pattern will be improved further, and the market supervision and anti-monopoly law enforcement systems with unification and regulation, definite rights and responsibilities, justice and efficiency as well as the rule of law and guarantee will be formed.
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