A Research On China's Comprehensive Market Supervision System

The comprehensive supervision has become a widely used phrase in the field of Chinese market supervision since the 3^rdd Plenary session of the 18^thh Central Committee of Chinese Communist Party during which a proposal that the economic system reform should go further with market playing the dominant role in distributing resources,and the market supervision system should be reformed and a unified market supervision should be implemented was put forward.The central committee of Chinese Communist Party issued the Proposal of furthering the reform of the Party and the State institutions on 21^stt March 2018,in which it's clearly stated that we should establish the State market supervision bureau,reform the market supervision system and implement unified market supervision.The issuance of the Proposal commenced the reform of comprehensive market supervision reform in China.This thesis is created under such circumstances and is intended to help the comprehensive market supervision carried out by the Party and the State through an overall review of the comprehensive market supervision from the perspective of economic law.First of all,in the 1^stt chapter,I analyze the concept of supervision and market supervision and then the concept of comprehensive market supervision,interpreting it in different levels.The general definition of supervision is to supervise and manage.However,it's different from surveillance or management,but an independent sub concept in modern administration instead.Market surveillance means the overall activities that the market supervisor imposes on the market activists,including restriction or direct interference.Nonetheless,market supervision contains the one on bonds and financial products and also the one on commodity market such as production material and consumer goods.The current market supervision system in China works in the following way,i.e.some professional supervision organisms such as China Securities Regulatory Commission supervises the key markets,while industrial and commercial bureau as the comprehensive supervision section,coupled with the Quality supervision bureau and State administration of commodity prices as particular supervision section supervise the commodity market.The so called comprehensive market supervision,originating from integrated management theory,guided by organizational behavior and scientific supervision is a“whole process”and intensive brand new market supervision system with a rational distribution of its internal organisms,functions and personnel,making full use of intelligent resources like science,technology and information.On the whole,the comprehensive market supervision is oriented to integrate its organizations,aimed at classified supervision,operating in a professional way and supported by social surveillance.In the following second chapter,I analyze the theoretic choice and base of comprehensive market supervision by means of the government and market relationship theory in the economic law,the transaction cost theory by Kos and the public choice theory by Buchanan.The government and market relationship theory evolved in several phases:in the 1^stt phase of planned economy,the government played a dominant one,in which the government was all mighty while the market was incompetent;the 2ⁿdd phase was an interactive period at the beginning of reform and open up,during which planned regulation played a leading role while the market regulation served as a supplement;the 3^rdd phase started from the 14^thh National Congress when the market economy system was proposed to be established till now when market plays a dominant role in distributing resources.The relationship between the government and the market is just like a“visible hand”and an“invisible hand”.The government is the former,with actual material existence while the market is the latter without the material existence but in form of social relations according to Adam Smith,the economist.These two hands constitute the two power sources.During the current stage,it's all the more necessary to let the market play the leading role,enjoy more freedom,cut down government supervision organization and implement the comprehensive supervision.The transaction cost theory proposed by the economist Kos can also be used to analyze the comprehensive market supervision.This theory focuses on cutting down transaction cost,finding out the most appropriate system to run the transaction according to the its specific characteristics.The transaction costs include searching cost,information cost,negotiation cost,decision cost,supervision cost and breach cost etc.which can be categorized into pre-transaction cost and post transaction cost.This theory also goes for the comprehensive market supervision.After a comprehensive analysis of market supervision costs,we come to a conclusion that the comprehensive supervision turns out to be the transaction with the lowest cost.According to the public choice theory,the analysis should be extended to another choice beyond the market,i.e.politic power.As the governmental interference in market economy has its own limit,so it's necessary to examine the deficiency of governmental surveillance through public choice theory and then make up for the deficiency by improving the political system.There are three basic action hypotheses of the public choice theory:First,the hypothesis of economic man in political activity.Second,individualism of methodology.As a main body,State institution contains various departments and personnel.They may put their own interest in the first priority when they make governmental decisions and implement governmental actions.Third,exchangeability of politics,which means when government makes decision and implements policies,it's similar to the transactions in economic market.Political process can be interpreted directly into the interest exchange to achieve the agreement in political conflict.Considering the sound reflection and supplement to Chinese comprehensive market supervision theory resulted from the analysis of foreign market supervision,I analyze the history,legitimate process,and some key supervision laws of American food and drug market supervision in the third chapter.The comprehensive market supervision method and concept in American food and drug market can serve as the comparative basis to provide the supervision measures in China.The American comprehensive market supervision theory can be dated back to idea of restricting governmental interference by Tomas Jefferson?1743-1826?,the writer of Declaration of Independence.According to the theory of“free choice”by an American economist Milton Freedman?1912-2006?,the government should be restricted by its own scientific rules when it interferes with the market.Market competition system being allowed,compared with the governmental system imposed increasingly on the market system,the market can better protect the consumers.The empirical analysis of American comprehensive market supervision is carried out mainly in its Food and Drug administration,which was established in 1906with the enactment of“Food and Drug Act”.I hope to provide a clearer picture of comprehensive market supervision through the analysis of the historical process of FDA from its establishment to enforcement and then to its looseness.What can we learn from example of American comprehensive market supervision to set up a scientific market supervision system and build advanced supervision concept in the future?First,we should gradually weaken the idea of the governmental supervision.It's more effective for market to correct its own errors than the government does.The reason is that every enterprise in the market faces a fierce competition to survive.Only with good reputation can they maximize their profit due to the competitive pressure.Second,we should set up proper market supervision system to make the comprehensive supervision play a full role.Third,we should be creative in supervision method,taking advantage of advanced technology like mass data,internet etc.so as to improve supervision efficiency and minimize the cost of labor and materials.Fourth,we should foster the concept of scientific market supervision and pay attention to risk prevention and control.The reform of comprehensive market supervision was initiated in march 2018and the previous situation was below our expectation.Thus,I may focus on the analysis of market supervision prior to the comprehensive market supervision reform in Chapter IV.During the previous long evolution of supervision law concept,we generally valued management over cultivation,valued pre-supervision over mid and post-supervision,valued crisis response over risk prevention,valued traditional supervision over hi-tech supervision,valued superficial supervision over precise supervision.Taking Shanghai,where I live,as my analytical sample,I analyze market supervision legislation,and market supervision institution setup etc.Regarding the main problems prior to the comprehensive market supervision reform,I drew the following conclusion:1^stincomplete laws and orders of market supervision,2ⁿdd redundant supervision organisms,3^rdd vague definition of obligations and rights,overlapping functions,4^thlow efficiency and procrastination,5^thinsufficient use of information and technology,6^thh disqualification of supervision personnel,lack of professionals.In a word,the current market supervision organism is short of proper laws,oversized,inefficient,disqualified and loose.The limited reform can hardly overcome all its deficiencies,while on the contrary,much easily lead to the opposite,i.e.swell after diminish,expand after contract.To sum up,I put forward some solutions and measures in the fields like legislation,organization setup,law concept etc.of Chinese comprehensive market supervision in the final Chapter V,hoping to mean some support to the evolution and development of comprehensive market supervision by means of economic law.Personally,I assume the overall route of comprehensive market supervision should include the following factors.First,the legislation of comprehensive market supervision should be firm.The related laws and orders should be made,modified and annulled without delay.Meanwhile legislation of comprehensive market supervision must be a perfect union of security and efficiency.The laws should be foreseeable,giving rise to the leadership of comprehensive market supervision.The system at the same time should be well-made,making the laws more executable.Moreover,it's even more important to enhance the overall design,avoiding the Qian Mu trap in comprehensive market supervision.It's important to clarify the levels when legislate.Laws and regulations have their own specific realm and no mixture should be made.During the legislation,it's recommendable to invite some market activists and related party with interests involved to get a better knowledge of their real desire and requirement.Secondly,comprehensive market supervision demands the absolute efficiency of its organization setup.The establishment of comprehensive market supervision must follow the law principles of being unified,authoritative,independent,harmonious and rigorous.The distribution of supervision rights should be clear,procedural,transparent,and focus on the strict management upon the entry.The creation of the comprehensive market supervision hand is tough and time consuming.We need to strengthen the supervision hand,making full use of all kinds of science and technology and also enrich the hand by means of co-supervision with social organizations,individuals and introduction of competition system of supervision organisms.Finally,we should also restrict the supervision hand by legislation,system design,system balance and surveillance from market activists and society etc.so as to make this hand under control.In conclusion,we need to use every means to correct the error,fill the vacancy and remove the redundancy in the previous market supervision.With the implementation of comprehensive market supervision,we may have a more authoritative,procedural,efficient and effective supervision,which is exactly the proper model of comprehensive market supervision we are pursuing.