Producers permitted to set prices and sell directly to the market
China has moved closer to dismantling a 2,000-year-old government monopoly on table salt by allowing producers to set prices and sell directly to the market.
The monopoly has supported successive Chinese rulers from the Han dynasty onwards, and helped pay for the construction of the Great Wall. The Communist party retained the monopoly after taking control of the country in 1949, with courts continuing to imprison private salt sellers even in the past decade.
The reforms, which break the government’s stranglehold over an essential element in Chinese cuisine, come as market-oriented changes in several other sectors aimed at curbing the power of state monopolies have stalled.
China’s state media on Monday said the move would lead to lower prices, with broadcaster CCTV hailing it as a “policy red envelope”, referring to the money-filled packets traditionally given away around Chinese new year.
Producers will be able to sell salt at a price set according to “production costs, product quality and market supply and demand” from the start of 2017, the country’s top economic planning agency, the National Development and Reform Commission, said last year.
But it warned that officials should ensure “basic stability” of salt prices by establishing reserves, similar to the way China controls pork prices, which are determined by the market and also a strategic reserve that officials can tap to mitigate inflation.
China’s State Council has said that salt producers will now be permitted to sell the substance directly across Chinese regions. Such producers previously sold to state-owned distribution companies, which made the bulk of the industry’s profits.
Zou Jialai, a Shanghai-based lawyer who has represented private salt producers, said: “Now that salt miners can directly sell to the market, prices will certainly fall. Consumers have more choice about where they can buy their salt from. That’s a breakthrough.”