To forge a ‘one-China market’, Beijing must overcome local resistance

With tensions growing at home and abroad ahead of China’s third plenum, a key economic planning session, the government faces the dual challenge of managing its relations with the local authorities and, more critically, of fostering cooperation between the local governments in the national pursuit for greater economic integration.

The challenge is that the local authorities have a strong tendency to prioritise local economic development. They do collaborate, notably in the Yangtze River Delta between Jiangsu, Zhejiang and Shanghai, as well as in economic clusters such as the Greater Bay Area. But cooperation rarely goes beyond relatively small areas.

In 2021, China released its 14th five-year plan, vowing to “accelerate the development of a unified domestic market” and “optimise the market environment according to internationally advanced rules and best practices”. Since then, the central government has ramped up its focus on the domestic economy under its “dual circulation” strategy.