The Institutional Opening And The Domestic Unified Market Construction

On March 25 th,2022,the Central Committee of the Communist Party of China and the State Council released the "Opinions on Accelerating the Construction of a National Unified Large Market".The goal is to accelerate the construction of a unified national market,fully leverage the advantages of the market in promoting competition and deepening division of labor,optimize resource allocation on a larger scale,and improve utilization efficiency.At the same time,constructing a unified national market can help clarify the boundaries between the government and the market,accelerate the transformation of government functions,and continuously improve the consistency of policies,the consistency of rules,and the coordination of execution.Against the backdrop of "further expanding opening-up to promote high-quality economic development",how to effectively utilize the introduction of foreign investment to serve the construction of a national unified large market and accelerate the construction process is a topic worthy of study.First,we analyze existing literature and research related to the "conceptual definition of a domestic unified large market","factors affecting the integration of the domestic market",and "the economic effects of foreign investment openness".We then hypothesize that the relationship between the inflow of foreign investment and the degree of market segmentation is not a simple linear relationship,but a "inverted U-shaped" relationship.Additionally,we believe that the gap in economic levels between regions and the development of advanced manufacturing will have a synergistic effect on both the integration of the domestic market and the introduction of foreign investment.In the empirical part,this article uses the degree of foreign investment openness as the core variable,measures the degree of market segmentation in the domestic market using the "price index method" as the dependent variable,and establishes a related regression model to test the above hypothesis.Through the research in this article,we draw the following conclusions: the relationship between the degree of foreign investment openness and market segmentation is not a simple linear relationship,but a significant "inverted U-shaped" relationship.Secondly,compared with inland regions,this "inverted U-shaped" relationship is more pronounced in coastal regions,and the more severe the market segmentation in both regions,the more significant the relationship becomes.In addition,when there are pairs of provinces in "inter-provincial relations" that include provinces in the eastern region or in the western region,this "inverted U-shaped" relationship is very significant.Finally,the gap in economic development between regions and the development of advanced manufacturing can not only directly affect market integration,but also have a moderating effect on the impact of introducing foreign investment on market integration.The smaller the gap in economic development between regions,the easier it is for foreign investment openness to promote market integration;the faster the development of advanced manufacturing,the easier it is for foreign investment openness to promote market integration.In summary,this article proposes the following policy recommendations: first,continue to deepen foreign investment openness,and China should also attract more foreign companies to invest in China by reducing market access barriers,expanding the scope of market access,optimizing the business environment,and other measures.Secondly,accelerate the upgrading of manufacturing,improve the competitiveness and innovation capabilities of manufacturing.Finally,China needs to strengthen cooperation and coordination between regions,promote the sharing and circulation of resources,strengthen infrastructure construction and public services,and improve inter-regional communication and interaction.Additionally,China should also use fiscal and tax policies to guide more enterprises and capital to tilt towards the central and western regions,and support local industrial development and economic construction.