china state council decree bans protectionism

managing local protectionist practices has been a source of frustration in china for almost as long as there has been an organised central authority. the communist central authorities have been attempting to break down inter-regional barriers to trade since at least 1958. now, of course, the stakes are much higher as wto obligations could lead to both internal and external frictions associated with local protectionist practices.

on april 21, premier zhu rongji signed a new state council decree prohibiting protectionism by localities in any form. the ban took effect april 29, the day the circular was published.

consisting of 28 articles, the regulations state that no unit or individual is allowed to stop or interfere in the sale and purchase of products and services from other parts of the country. departments and individuals responsible for such activities will be punished according to law.

although the regulations are intended to build and improve a unitary, fair, and orderly market system in china, history instructs us to recognise the powerful forces of kinship and community at the local level. a mere prohibition will not be enough to give the regulations effect. accordingly, the future may hold an interesting skirmish as trading partners begin to realise the depth of chinese protectionist practices, and seek to bring wto disciplines to bear upon local internal barriers to trade.

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