Building a unified national market serves as a fundamental support and intrinsic requirement for creating a new development pattern and pursuing high-quality economic development. This paper examines the impact of external demand shocks and domestic market segmentation on China’ s economic growth and economic structure. It further discusses the potential role of establishing a unified national market in promoting the high-quality development of China’ s economy. Based on the dynamic quantitative spatial general equilibrium model, this paper characterizes the relationships among external demand shocks, market segmentation, economic growth, and economic structure within a unified theoretical framework. It accounts for major macroeconomic phenomena observed in China before and after the 2008 global financial crisis, such as the initial rise and subsequent decline in the economic growth rate and the transition from imbalance to balance in industrial structure, income distribution structure, and consumption-saving structure. The study finds that domestic market segmentation exacerbates the negative effects of shrinking external demand on economic growth and economic structure, while a unified national market can reduce the extent of decline in the economic growth rate by two-thirds. This paper further estimates the potential impacts of reducing segmentation in product and labor markets on economic growth and social welfare, and finds that product market integration has a more significant effect on promoting economic growth, while labor market integration is more beneficial for improving social welfare. Both help to facilitate high-quality economic rebalancing. The policy implication of this paper lies in that developing a unified national market has a great potential to drive economic growth and economic rebalancing. Reform is needed to unleash institutional dividends, enabling regions to shift from “segmentation” to “regional division of labor,” and facilitating high-quality economic development.
The incentive mechanism of competition for growth often produces locally oriented innovation policies, creating asymmetric competition with countries that pursue strategically coordinated innovation. As a result, innovation in core technologies in key fields within China’s manufacturing sector remains confined to low-end segments and struggles to achieve breakthroughs. This study takes the development of a unified national market—aimed at optimizing resource allocation and mitigating regional market segmentation—as its starting point, and constructs a Footloose Entrepreneur model that incorporates the criticality of technology. Our theoretical derivation and numerical simulations yield two conclusions. First, the development of a unified national market can effectively promote regional innovation in core technologies in key fields. Second, this effort requires sound government guidance. Otherwise, non-benign interregional market barriers may lead to the agglomeration of high-end factors, thereby impeding the spillover of innovation to surrounding regions.
Effectively integrating China’s domestic market to make use of a super-large market scale is essential for establishing a new development paradigm characterized by dual circulation. This paper utilizes regional bilateral trust data from the Chinese Entrepreneur Survey System (CESS) alongside non-local supplier data from listed companies to systematically investigate the influence of bilateral trust on the cross-regional distribution of suppliers. The findings indicate that the level of trust between enterprises and non local suppliers can promote cooperation between enterprises and suppliers from different regions. Moreover, bilateral trust and formal institutional frameworks exhibit a substitution effect in supporting cooperation with non-local suppliers. Mechanism analyses reveal that bilateral trust enhances cooperation with non-local suppliers by reducing search costs, contracting expenses, and managerial and supervisory fees. Heterogeneity analyses reveal that in the presence of opportunistic risks and increased economic policy uncertainty, bilateral trust significantly enhances the formation of partnerships with non local suppliers. Further analyses show that bilateral trust also prolongs the duration of such interregional cooperative relationships. Ultimately, bilateral trust promotes the interregional division of production by encouraging suppliers to expand their distribution across regions. Approaching from the perspective of bilateral trust as an informal institution, this paper aims to offer new insights to support China’s efforts in advancing a unified national market.
Fostering a diverse regional technology environment within a unified national market is one of the key approaches to encouraging enterprises to enhance technological complexity. From the perspective of regional technological diversification, this paper investigates the mechanisms and effects of building unified national commodity and factor markets on enterprise technological complexity. The construction of unified national commodity, labor, and capital markets helps enhance enterprise technological complexity. The development of a unified national market cultivates diversified market demand and factor supply, thereby promoting regional technological diversification and advancing enterprise technological complexity. Both related and unrelated regional technological diversification have played a significant positive role in enhancing enterprise technological complexity during the construction of a unified national market. Further research reveals that a unified national market facilitated by transportation infrastructure development significantly enhances enterprise technological complexity, whereas a unified national market promoted by local government policies does not yield notable effects. Moreover, owing to the spatial correlation of unified national market construction, the level of such markets in adjacent regions positively influences the technological complexity of local enterprises. Finally, the development of a unified national market primarily increases the technological complexity of non-state-owned and high-tech enterprises, while its impact on state-owned and non-high-tech enterprises is not statistically significant. The conclusions of this study provide insights for fully recognizing the benefits of building a unified national market and for accelerating enterprises’ scientific and technological self reliance.
Market expansion and division of labor development are two underlying logics for the development of a unified national market. A high-level socialist market economy needs not only a modern market system based on generalization and deepening division of labor, but also a super large market with powerful development and regulation functions, so as to become the basic mechanism of resource allocation supporting Chinese modernization. The free flow of goods, factors, and resources and the competitive order are two fundamental rules that need to be unified in the development of a unified national market. The gradual shift of China’s administrative decentralization reform toward economic decentralization is the practical logic and basic path of building a unified national market. Under the current basic structure of the transitional economy, as a sub-optimal choice, the development of a unified national market has to be based on clarifying the boundary between the government and the market, and the integration of affairs involving the government and the market should be managed and promoted separately.