Exposure To The Unity Of The Wto, China's Domestic Market

The Chinese government had taken efforts to construct the socialistic market economy since the reform and opening. The unified domestic market has been the important goal of economic construction of the market all the time too. But in the process of the reform, to promote local economy, the local government had taken some measures of local protectionism in varying degrees. The Chinese market has presented the market segmentation phenomenon of the certain degree. And it has hindered the development of market economy. Market segmentation is on the contrary to the integrated economic It means the local government utilizes administration measures to prevent local market from nonlocal manufacturers, and to limit local capital flow out. Our country has already stayed in WTO at present, and the basic point of departure of WTO is to establish an open, equal, normal market environment. Market segmentation has unavoidable conflicts with WTO principle. Besides, under WTO's frame, market segmentation have obstacle objectively to avoid the trade friction effectively and utilize the non-tariff trade barriers on the market. These questions may hinder the development of the economy. In the face of the quickening of the socialist market economic system, and in the face of WTO frame requisition on China, local market segmentation becomes great problem of development and influences the economic reform of our country more and more. So the study of domestic market segmentation, has important meanings to the sound development of our the whole economy. The purpose of study in this article is to discuss the current situation of domestic market segmentation and form the mechanism, and analyze the integrated meaning of the market from economics and WTO principle, and then propose countermeasures to deal with the market segmentation.The logic structure of this article is divided into four chapters. Chapter one synthesizes prices, trade barriers and transport states to set up an initial trade barrier model. The whole countries' and provinces' price indexes, distance indexes and transport state indexes from 1978 - 2001 have been applied to this model to work outthe trade barrier of provinces of China from 1978-2001.Thus the domestic market segmentation state in nearly 20 years had been quantitative analysis. The degree of China's domestic market segmentation and variation tendency is clear. Chapter two analysis qualitatively the different forms of the expression of China's domestic market segmentation, studies the reason of market segmentation, and discuses the pros and cons of domestic market segmentation. Chapter three recommends the request for unifying the market of the economic integration theory and WTO principles. The focal point of theory analyses lies in using the theory of customs union to analyze the integrated welfare effect of the domestic market. In this chapter, customs union theory and the present conditions have been connected to discuss the realistic meaning of the domestic market integration. Chapter four is suggestions to drive the domestic market into integration on the base of the analysis and current reality. The legal construction, the tax system reform and the proposes of separating enterprises form government will be most important to the integration of domestic market in the future.