Improve standardization to build a unified market

The third plenary session of the 20th Central Committee of the Communist Party of China set clear goals for accelerating the construction of a unified national market. The communique issued by the third plenary session emphasizes the need to improve the national standardization system, deepen local standards' management reform, promote fair competition, boost efforts to curb monopoly and unfair competition, and abandon regulations and practices that hinder the development of a unified national market.

By unifying technical standards, service norms and quality requirements, the authorities can reduce market players' information and transaction costs, promote the free flow of goods and factors, and improve market efficiency. Standardization of the circulation sector is especially important for ensuring the smooth flow of the national economy.

Standardization reforms in logistics intensified

In recent years, China has made significant progress in standardization reforms in sectors such as logistics. For example, logistics costs as a share of the business revenue have reduced on average by 31.6 percent in pilot cities while employment has increased by 10.5 percent.

However, the construction of a unified national market still faces challenges. For example, the current standardization mechanism is confusing and problematic due to overlapping and conflicting standards. Different ministries, industrial associations and local governments often operate independently, leading to use of multiple, contradictory standards in various fields. This undermines the authority and effective implementation of standards. For example, China has more than 6,000 construction engineering standards, yet only about one-third of them are enforced.

Emerging sectors suffer due to outdated standards. Strategic emerging industries and modern services urgently need guidance and regulation to develop, but the lack of development and upgrading of standards — the adoption rate of international standards in high-tech industries is less than 30 percent, which hinders innovation and growth — reduces the overall effectiveness of the standardization system.

Local standards, in many cases, have become market barriers. Some local governments set market entry thresholds under the guise of local standards, blocking the entry of products and services from other areas and thus undermining efforts to develop a unified national market. Official data show that 15 percent of provinces still have independent local standardization systems.

Standards are also used to build and maintain administrative monopolies. Government departments and State-owned enterprises leverage their powers to set standards that serve their own interests and exclude competitors, hindering the free flow of factors. For instance, some provinces require public procurement to meet "local standards", barring out-of-province enterprises from bidding.

As for large enterprises, they often set standards higher than the national level, thus erecting technological barriers and building market monopolies, which harm small and medium-sized enterprises and consumers.

Even some mandatory standards are not fully or properly implemented due to the lack of a dedicated legal framework, while the penalty/punishment for violations are too lenient to prevent the violation of standards. Also, SMEs often lack the initiative or fail to voluntarily comply with the set standards even if they pass certification.

No effective supervision of implementation

Also, supervision on the implementation of standards is weak, while cross-regional enforcement remains a challenge and coordination between administrative and judicial enforcement is poor. And there is a shortage of talents that specialize in standardization, with most enterprises not having dedicated departments or posts for standardization management, perhaps because the talent training system is underdeveloped and only a few universities offer standardization-related majors.

Therefore, the standardization mechanisms should be urgently improved, because the existing policies for professional title evaluation and salary distribution are not conducive to cultivating talents that specialize in standardization.

To address the above issues, the authorities need to deepen reforms, remove institutional barriers, and create a unified, open and orderly standardization ecosystem, and consolidate the existing standards, for which reviews, revisions and upgrading of standards are needed along with measures to improve coordination among national, industrial, local and group standards.

In addition, priority should be accorded to core standards in fields such as new generation information and communications technology, high-end equipment, new materials and biomedicine, so as to facilitate the rapid and healthy development of industries.

Systemic integration and coordination of standards

The authorities should also promote the systemic integration and coordination of standards; link upstream and downstream standards, and align them with international standards; while encouraging social organizations and enterprises to develop advanced standards. Among the other important tasks are upgrading or abolishing the local standards that hinder the development of a unified national market, and the elimination of local standards that create market barriers and violate the principles of fair competition.

It is also important to minutely review and, if need be, revise the standards related to market access and product certification, so as to prevent the abuse of administrative powers, as well as to regulate and guide the independent standard-setting activities of enterprises, and ensure lower-level standards conform to the national standards.

It is also essential to provide stronger protection for those implementing the standards, revise the standardization laws to ensure the comprehensive enforcement of the mandatory standards, and establish comprehensive systems for administrative, civil and criminal accountability for violating mandatory standards.

The authorities should also establish coordination mechanisms among government departments for the implementation of standards at the national, provincial, city and town levels, use innovative methods to implement the standards, and deepen coordination between administrative enforcement departments and the judiciary.

The authorities could also try using social media platforms to raise awareness of standards.

Cultivate talents that specialize in standards

To organize training programs for high-level standardization talents, standardization-related majors have to be introduced in universities and their curriculums upgraded accordingly, the evaluation and incentive systems for talents improved, and make standardization work a key criterion for professional title evaluations and income distribution.

The new development stage demands higher-level standardization work to realize China's goal of becoming a modern socialist country.

First, there is a need to make standardization a national strategic priority by establishing a national standardization development framework that outlines the reform goals, key tasks and implementation methods, as well as by coordinating the development methods of national, industrial, local and group standards, with the aim of establishing a standardization ecosystem based on government guidance, market regulations and social participation.

Standardization Law needs to be revised

Second, the Standardization Law should be revised to make clear the legal status and procedures for developing and implementing various standards and their management regulations to standardize the processes of project initiation, drafting, review, approval, and publication, and strengthen local laws and regulations to lay a legal solid legal foundation for standardization reform.

Third, the focus should be on areas such as market access, intellectual property rights protection, fair competition and social credit through the establishment of unified rules and standards. Additionally, targeted standardization initiatives should be taken in key industries like manufacturing, agriculture, services and social service sectors to develop high-level standards, and develop the standards for emerging fields such as the digital economy and green development.

Fourth, the authorities should also increase central and local government funding for promoting standardization, including establishing dedicated funds to support the development and implementation of standards, utilize government procurement policies to encourage the adoption of advanced standards, improve financial support methods including offering loans and guarantees to the businesses involved in standardization work, and attract more private capital to the standardization field.

How to increase China's influence worldwide

Fifth, a workable arrangement has to be made to ensure more Chinese experts are appointed to key positions in international standardization organizations, in order to increase China's global influence, expedite the alignment of domestic standards with international standards, promote mutual recognition between Chinese and foreign standards, leverage action plans such as the Belt and Road Initiative to promote Chinese standards worldwide.

The authorities should also focus on establishing and improving coordination mechanisms for standardization to enhance communication and collaboration among different government departments, central and local authorities, and the civilian and military sectors.

Standardization reform should be integrated into China's broader plan to devise a new development paradigm and promote high-quality development. By advancing standardization reform, China can build a unified national market, which would drive the economy toward sustainable, high-quality development.

The author is an associate professor at the National School of Development, Peking University.

The views don't necessarily represent those of China Daily.

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