With an irreversible trend, China's market-oriented economy is bound to become a mature market economy. As an important part of China's market economy, the process of the development of market-oriented domestic trade coincides with the development of economy, the deepening of reforms and the further opening-up to the outside world.

(Ⅰ)Further Marketization of Trading Entities

1. Restructuring Slate-Owned Domestic Trading Entities

State-owned domestic trading entities shall be further reorganized or transformed in accordance with the Company Law of the People' s Republic of China, to become independent economic entities that make their own managerial decisions, take full responsibility for their own profits and losses, and conduct business, go bankruptcy or pay off debts by law. Then, the domestic trade will be in a situation that various economic entities (including legally established companies and individual businesses etc) can compete equally.

2. Internationalizing Domestic Trade

It is mainly revealed in the two trends: one is domestic trading entities' accession to the international market, and the other foreign trading entities' entry into the Chinese market. With the further opening-up of China's economy and its merging with the whole international economy, more international companies will enter China for investments, participating in the domestic circulation trade activities. The same period will see more domestic trading entities expand their business beyond China.

3. Integrating Domestic and Foreign Trades

With the further deepening of reforms in China's economic system, the division between the domestic trade and the foreign trade will be replaced with an integration of the domestic trade and the foreign trade. Furthermore, with the continuous upgrade of market openness, each economic entity shall be granted tile right to market its commodities at home and abroad.

(Ⅱ)Further Marketization of Prices

1. Prices of Commodities and Services

In a competitive sector, the price for a certain commodity is determined by the relation between supply and demand. For naturally monopolized products and important products related to the national economy and the people's livelihood, their prices shall be decided by means of holding price policy hearing in conformity with the provisions and requirements of Price Law of the People's Republic of China. In the end, price shall be decided in a democratic and open manlier.

2. Factor Prices

With the gradual improvement and maturity of factor markets like labor market, capital market and land market etc, the factor prices in domestic market shall be further market-oriented. The factor prices and products' market prices are complementary, forming a market price system reflecting the development of China's market economy.

3. Harmonization of Domestic and International Prices

With the deepening of the opening-up to the outside world and the development of China's foreign economic and trade relation, the domestic commodity prices are bound to be consistent with the international market prices, and a free trade system framework under appropriate control shall be established in China.

(Ⅲ)Government Administration to Be Further Law Based

1. Government administration to be further legislation supported, standardized and systematized

By means of further improving relevant laws and by laws regulating various legal relations resulted from file running of domestic trade, the whole domestic trade is to be run within the legal framework, including domestic trading entities (to be organized, run and go bankruptcy by laws), prices and the whole process of running domestic trade.

2. Cultivating intermediary organizations

In the wake of further maturity of market economy, it is certain that government control over the domestic trade shall be shifted in many aspects to intermediary organizations, such as agency engaged in brokerage, and those supplying specialized services for the society or supervising and managing economic activities (including law firms, accounting firms and auditing firms etc), which will play a more important role.

3. Shifting government function from regulation to service

In the domestic trade, a complete change in government function will be realized from administration to service. The government administration function on the domestic trade will be mainly revealed in the following aspects: establishing a sound trading order and defending a market environment with fair competition, opposing monopoly and unfair competition and providing a system to ensure the whole market economy operated orderly.

(Ⅳ)Government Controlled Commodities to Be Further Market-Oriented

In the wake of building a market economy, the commodities and services controlled by the government shall be given a further reform. Some of the commodities like grain, cotton, crude oil and oil products etc will be grouped into the national strategic material or ordinary commodity. Operational enterprises shall be further restructured in accordance with the requirements of modern enterprises system, being really integrated with the market economy system. In addition, some others such as telecom, railway, civil aviation etc shall be given a further reform in conformity with the requirements of the market economy law, becoming real market economy entities.

In a word, under the precondition of observing the international practice, market economy law and running rule without any prejudice to China's national interests, the marketization of China's domestic trade will be pushed forward constantly.

(China.org.cn November 7, 2003)