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Product Market Regulation and Competition in China

  • Paul Conway
  • Richard Herd
  • Thomas Chalaux
  • Ping He
  • Jianxun Yu

The extent of competition in product markets is an important determinant of economic growth in both developed and developing countries. This paper uses the 2008 vintage of the OECD indicators of product market regulation to assess the extent to which China’s regulatory environment is supportive of competition in markets for goods and services. The results indicate that, although competition is increasingly robust across most markets, the overall level of product market regulation is still restrictive in international comparison. These impediments to competition are likely to constrain economic growth as the Chinese economy continues to develop and becomes more sophisticated. The paper goes on to review various aspects of China’s regulatory framework and suggests a number of policy initiatives that would improve the extent to which competitive market forces are able to operate. Breaking the traditional links between state-owned enterprises and government agencies is an ongoing challenge. Reducing administrative burdens, increasing private sector involvement in network sectors and lowering barriers to foreign direct investment in services would also increase competition and enhance productivity growth going forward. Some of the reforms introduced by the Chinese government over the past two years go in this direction and should therefore help foster growth. This paper relates to the 2010 OECD Economic Review of China (www.oecd.org/eco/surveys/china). Règlementation du marché des produits et concurrence en Chine L’étendue de la concurrence sur le marché des produits est un déterminant important de la croissance économique dans les pays développés et en développement. Ce papier utilise la version 2008 des indicateurs de réglementation du marché des produits de l’OCDE pour évaluer dans quelle mesure l’environnement règlementaire en Chine favorise la concurrence sur les marchés de biens et services. Les résultats indiquent que, bien que la concurrence s’intensifie sur la plupart des marchés, le niveau général de la réglementation demeure restrictif au plan international. Ces entraves à la concurrence sont susceptibles de freiner la croissance à mesure que l’économie chinoise continue de se développer et devient plus sophistiquée. Ce papier examine ensuite différents aspects du cadre règlementaire chinois, et suggère différents types de mesures qui donneraient une plus grande latitude aux forces de marché. Briser les liens traditionnels entre entreprises publiques et agences gouvernementales reste un défi. Réduire les contraintes administratives, accroître la participation du secteur privé dans les secteurs de réseau et abaisser les barrières à l’investissement direct étranger dans les services stimuleraient aussi la concurrence et les progrès de productivité. Certaines des réformes introduites par le gouvernement chinois durant les deux dernières années vont dans ce sens et devraient donc encourager la croissance. Ce document se rapporte à l’Étude économique de la Chine de l’OCDE, 2010, (www.oecd.org/eco/etudes/chine).

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Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 823.

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Date of creation: 16 Dec 2010
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Handle: RePEc:oec:ecoaaa:823-en
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