How can market rules be established so that they are fair and reasonable?

Market rules are the basic norms of conduct and standards for market economy entities (legal persons or natural persons), the rules that keep the market economy functioning, and a kind of social norm applicable to market behavior. From the history of the development of the market economy, the formation of market rules mainly falls into two types: one is the order rules spontaneously formed by market entities amid conflicts of interest and competition, namely induced institutional change; the other is rules that the market cannot form spontaneously and that require an external compulsory force (namely the government) to provide, namely compulsory institutional change. In Western countries, market rules are mainly formed spontaneously through the market. For transition economies, however, in the early stage of establishing a market system, what is often needed first is compulsory rules.

Since reform and opening up, China has made important progress in building its market system. With the full liberalization of the grain purchasing market in 2004, China established the dominant position of the market in regulating supply and demand, and basically formed a nationally unified market system. However, a series of problems still exist, especially in wholesale markets, which serve as the main distribution channel for agricultural products; there is a need for standardization in investment, operation, management and daily operations, and this has become a bottleneck constraining the development of China's agricultural product market. The government should play a major and crucial role, while also guiding internal game-playing within the market, so as to gradually form a trend of spontaneous rule formation.

First, the government should provide strong impetus. It is recommended to speed up the formulation of laws and regulations on agricultural product circulation, clarify market status, and regulate market behavior. Drawing on the practices and experience of countries such as the United States, Japan and Germany, as well as places in China such as Wuhan and Shouguang in integrated management of agricultural product circulation, we should actively advance reform of the agricultural product circulation system and establish a circulation system of integrated management across the entire agricultural industry chain.

Second, unify market supervision. Establish and improve fair and reasonable market rules, and never directly step into the market or interfere with the normal business activities of market entities. Formulate principled provisions and clear, practicable detailed rules; all actors, including the government, must act in accordance with laws and regulations, and accountability must be strengthened.

Third, implement negative list management. The government should list the industries, fields and businesses that are prohibited and restricted from entry, managing only “what cannot be done” and no longer proposing “encouraged projects”. The government should simultaneously establish and improve the institutional and procedural rules of negative list management. At the same time, strengthen the construction of the social credit system and form a market system aligned with international standards.

Fourth, give play to the role of market entities and market organizations. Take market entities as the main force in establishing market rules, and industry associations and other organizations as the main support for establishing market rules, so as to spontaneously establish and improve self-disciplinary management systems, trading systems and codes of conduct for the agricultural product market.