When George Soros visited China last year, somebody asked him what the most deciding factor was when he do some investment, he answered, "uncertainty" The disorder of market competition will aggravate the uncertainty. China's economy now is on the transition period, to rectify and regulate marketsgroupsand eliminate the uncertainty caused by contrived factors is of great importance to maintain a benign development of China's economy.
Vice-Premier Li Lanqing said recently achievements had been made in rectifying and regulating marketsgroupsin the first half of this year. He criticized some local officials for lack of understanding and protectionism which had hampered efforts in some areas. He has called for greater efforts to regulate the market order.
Li Lanqing, also member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee and head of the national leadingsgroupson rectifying and regulating market economic order, made the call at the group's fifth meeting in Beijing on June 24.
Vice-Premier Wu Bangguo and State Councilor Wu Yi, who are both deputy heads of the leading group, also attended the meeting.
That shows Chinese government has decided to spend great efforts to solve the market disorder problem in consideration of the benign development of Chinese economy and the pressure from media domestic and abroad.
In the second half of the year, greater efforts should be made to crack down on illegal market activities, especially the making and selling of shoddy goods. Unlicensed Internet bars must be closed down, he stressed. (In fact, the government should be partially responsible for the existence of so many unlicensed Internet bars. It is the unreasonable disciplines made by the government that prick up the rent-seeking activities and violet the market order.)
Li also called for cracking down on illegal activities in the tourism industry including unlicensed travel agencies, tourist vehicles and tour guides.
Premier Zhu Rongji had called for greater resolve and more effective measures to continue rectifying and regulating thesgroupsof the market economy while delivering the Report on the Work of the Government at the opening of the annual session of the National People's Congress (NPC) in March.
Thoroughly rectifying and regulating thesgroupsof the market economy is urgently needed to expand domestic demand and ensure sound economic growth.
It is an inevitable choice China should make in consequence of its entrysintosthe WTO and the new steps taken to open the country to the outside world. This is also an important measure to improve the socialist market economic system, upon which success or failure of China's modernization hinges, he added.
On the basis of the initial results achieved last year, China should better press ahead with this task with a still greater resolve and even more effective measures, noting that the work should be carried out in an all-round way while emphasizing key points.
The government should pay great attention to the current outstanding problems and concentrate on the following tasks:
First, China should severely crack down on all illegal and criminal activities related to the production and sale of counterfeit and shoddy goods, especially food, medicines and medical apparatus that seriously endanger people's lives and health.
Second, China should continue rectifying and standardizing the markets for construction and cultural products and thesgroupsof finance and taxation.
Unremitting efforts must be made to combat such crimes as tax fraud and evasion, evading foreign exchange control, obtaining foreign currency through deception, pyramid selling and smuggling. Such violations of the law as forging invoices and vouchers and falsifying accounts must be treated with severely.
Furthermore, China will regulate and standardize accountants firms and other intermediary service organizations. The government will make great efforts to rectify thesgroupsof the tourism market.
Third, the financialsgroupshas to be thoroughly rectified. The authorities will earnestly investigate and deal with business activities that violate laws and regulations concerning banks, securities and insurance companies, and other financial institutions.
China will resolutely ban illegal financial institutions and illegal financial activities. Financial swindling, illegal fund-raising, manipulation of the securities market, insider trading, and malicious evasion and cancellation of debts should be investigated and dealt with according to law.
Fourth, local protectionism and monopoly of industries must be eliminated. In China, local protection exists in many industries, which has set barricades for the unification of Chinese economy. Take automobile as an example; the taxies in Changchunswheresthe First-automobile is located are nearly all Jetaes while in Shanghai nearly all Santanaes. The government will deal with and stop, according to the law, the acts of abusing privileges to set up trade barriers, obstruct commodity circulation and impede fair competition.
China will continue to tighten management of the market for finished oil and market fairs. The government will launch campaigns to rectify prices and fees.
Fifth, the management of industrial and traffic safety will be strengthened. The safety responsibility system should be improved.
In the recent years, lured by gravies, some people didn't pay much attention of industrial safety and led to many abominable accidents. To prevent major industrial accidents, the government will take effective measures to correct supervision and performance of work that violate safety rules and regulations.
The government will tighten supervision and management over the entire process of handling dangerous chemicals and inflammable and explosive materials from production, marketing, transport and warehousing to use.
Factories and mines that produce inferior products, contaminate the environment, damage resources or do not meet production safety standards must without exception be shut down in accordance with the law.
In rectifying and standardizing thesgroupsof the market economy, the government will concentrate on investigating major cases and severely punish those guilty of crimes or corruption.
In its efforts to rectify and regulate thesgroupsof the market economy, the government will try to seek both temporary and permanent solutions while focusing on the permanent solution.
The qualifications of all kinds of market entities should be carefully examined to properly control market access. Government departments at all levels must sever their ties with enterprises and intermediary organs in accordance with relevant regulations.
Premier Zhu promised that the government will further take effective measures to implement the regulations on separately managing the receipts and expenditures of administrative charges and incomes from imposition of fines and confiscation. Comprehensive and departmental budgets should be prepared to ensure that all departments have sufficient funds to perform their duties according to law and strictly enforce the law.
The government also promised to strengthen the rule of law, improve the regulations linking administrative penalties to criminal investigation and prosecution, resolutely prevent and correct the acts of failing to punish lawbreakers and replacing punishment with imposing a fine, and deal with violations of the law more severely.
China will solve problems of law enforcement involving authorities at different levels or various government departments at the same level and improve the system of responsibility for law enforcement and the system of accountability.
China will effectively improve social credibility and gradually develop moral standards throughout society based on honesty and moral integrity. The premier said that China will accelerate the establishment of credibility records for enterprises, intermediary agencies and individuals, making those with a record of bad conduct pay a price for what they have done, and have their credibility ruined and even punishing them according to law.
China will extensively apply modern means of supervision, utilize online information, establish interconnected networks and share information.
China will accelerate the reform of the system of distributing goods and develop modern methods of distribution to make it difficult to put counterfeits and shoddy goods on the market.
The government will give full play to the role of industrial associations and intermediary organizations change and improve their mechanisms of self-discipline and attach importance to supervision by the general public and news media.
Since the campaign to rectify and regulate the market economicsgroupswas launched nationwide in April 2001, great achievements have been made in joint actions to crack down on the manufacturing and sales of counterfeit foodstuffs, medicines, wadded cotton and farming materials, as well as unlawful motor vehicle assembling.
A total of 5,701 sanitation licenses have been revoked nationwide, 20,420 counterfeit products manufacturing spots crashed, 12,643 business licenses cancelled or revoked, and 344 suspects transferred to public security and judicial bodies. Some 38,700 cases related to the manufacturing and sales of fake medicines and medical apparatus valued at 344 million yuan (US.6 million) have been handled.
A total of 29,400 cases related to the production and sales of farming materials have been dealt with, with 15,296 business licenses revoked. In addition, 2,005 cases involved in the production and sales of fake wadded cotton have been handled, with 981 production spots cracked and 1,600 tons of wadded cotton ferreted out.
In the effort to rectify and regulate the cultural market, 94,000 internet cafes nationwide have been rectified, 12,000 electronic games spots banned, 34,561 cases involving prostitution and gambling investigated and punished, 16,529 unregistered entertainment spots banned, 6,017 spots have their licenses revoked, 6,200 cases related to illegal publication have been investigated and punished.
A campaign to crack down on pyramid selling, rectify and regulate the construction market and strengthen tax collection and management has been unfolded nationwide in an all-round way. In 2001, some 2,340 cases involving illegal pyramid selling were investigated and punished, with 2,559 pyramid selling hideouts destroyed and 170,000 people engaged in illegal pyramid selling punished. A total of 138,492 construction projects were subject to examination, with 39,262 found to get involved in illegal activities.