China’s localities should reduce their dependence on land and tax incentives and instead strengthen industrial chains and improve their business environments to attract investment, a state-owned newspaper has urged in a front-page commentary.
Aggressive land deals, tax breaks and subsidies – frequently used to drive investment by local governments in past decades – have led to homogeneous competition and protectionism, both of which are weighing down the growth of the world’s second-largest economy, the Economic Daily warned on Sunday.
Prominently featured in the newspaper affiliated with the State Council, China’s cabinet, the piece delivered another high-profile call from Beijing for a change in approach to draw investment and foster a “unified domestic market” to guard against uncertainties.
“China’s vast market, with its enormous scale and growth potential, remains a significant advantage and a solid foundation for navigating changing circumstances,” it said.
“However, persistent issues like local protectionism and market fragmentation continue to hinder high-quality economic development.”