Apart from building a rule-of-law business environment, China needs to let the legal regime play a major role in regulating the market. A series of food and drug safety scandals involving everything from contaminated infant formula to recycled "gutter" oil is testimony of administrative approval being ineffective in market regulation. To shift the focus from administrative regulation to legal regulation, it is imperative to draw a clear line between administrative approval and market regulation, to improve the legal regulatory framework for the consumer market while setting up an integrated and authoritative regulatory body to oversee the market.

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As government entities abusing their powers to hinder market operations are a major obstacle to fair competition and market order, the national anti-monopoly law should be reviewed to clarify to what extent the provision on anti-administrative monopoly should be enforced.

A rule-of-law market economy must also entail economic justice. Obsessed with GDP growth, many local governments have taken risks with judicial intervention. It is thus necessary to free the judiciary from the influence of local policymakers.

For this purpose, a central-local dual court system can be set up, so that central-level courts can specialize in hearing cases concerning taxation, finance, bankruptcy, intellectual property and other key economic issues, while general civil and commercial cases can go to local courts.

Also, the resources and human capital of the judicial arm should be properly separated from the administrative divisions and subject to management at the central level.

Chinese people are now expecting the country's reform bill to be further elaborated at the ongoing annual sessions of the country's top legislature and the political consultative body. The aim of building a socialist country under the rule of law undoubtedly serves the request for economic reform, and the country is now set on course to pursue this goal starting with building a rule-of-law market economy.

The author is president of the China Institute for Reform and Development.

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