China State Council Advances Unified Market, PBOC Law Reform

Chinese Premier Li Qiang chaired a State Council executive meeting on May 21 in Beijing, addressing three major policy priorities: advancing the construction of a unified national market, approving the 15th Five-Year Plan for modern emergency system construction, and discussing the revised draft of the People’s Bank of China Law, according to People’s Daily. The meeting’s decisions, published on the front page of People’s Daily on May 22, signal the Chinese government’s continued focus on structural economic reforms, risk management, and financial system modernization during the first year of the 15th Five-Year Plan period (2026-2030).

Unified National Market: Breaking Down Barriers

The meeting studied work related to advancing the unified national market, a key policy priority under the Xi Jinping administration aimed at dismantling local protectionism and creating a single, integrated domestic market. The State Council emphasized that while “positive results and important progress” have been achieved, sustained effort remains necessary.

Officials called for three “deep advances”: institutional construction to improve property rights protection, market access, fair competition, social credit, and market exit mechanisms; high-standard market facility connectivity to lower logistics costs; and key area market unification to deliver tangible benefits to citizens and businesses. The meeting stressed the need to “break through bottlenecks and blockages, eliminate various explicit and implicit barriers, and fully unleash market vitality and potential.”

According to analysis published by Securities Times, remaining bottlenecks involve complex issues including central-local government authority relations, government-market dynamics, and the transformation of local economic development models. Professor Dai Zhixin of Renmin University’s School of Finance noted that regulations on unified national market construction serve as the “institutional foundation” of the market, ensuring that all activities from access to transactions to supervision and exit have clear rules to follow.

Emergency System: 15th Five-Year Plan Approved

The meeting reviewed and approved the 15th Five-Year Plan for Modern Emergency System Construction, reflecting China’s ongoing effort to institutionalize lessons from the COVID-19 pandemic, natural disasters, and industrial accidents. The State Council emphasized that emergency management “concerns the safety of people’s lives and property, and concerns the overall situation of reform, development, and stability.”

The plan prioritizes a shift from post-incident response to pre-incident prevention, with emphasis on risk source control, strengthened monitoring and early warning systems, optimized emergency force deployment, and comprehensive safety rectification across key industries. The “Big Security, Big Emergency” framework represents a holistic approach to emergency management, coordinating human, technological, engineering, and management-based prevention measures.

PBOC Law Revision: Modernizing Central Bank Governance

In a significant step for China’s financial regulatory framework, the meeting discussed and approved in principle the revised draft of the People’s Bank of China Law, deciding to submit it to the Standing Committee of the National People’s Congress for deliberation. The current PBOC Law has been in effect since its 2003 revision — over two decades without major updates.

Since 2003, China’s financial sector has undergone profound changes including regulatory system reforms, digital transformation, and evolving demands from the real economy. The 2023 Party and State Institutional Reform Plan and the Central Financial Work Conference clarified new functions and missions for the central bank, creating urgency for legal modernization.

The State Council described the revision as “a foundational project for perfecting our country’s financial legal system,” calling for strengthened financial rule of law and accelerated improvement of the central bank system. The PBOC’s 2026 Financial Rule of Law Work Conference noted that 2025 saw “important progress” in coordinating multiple financial legislative efforts, including both the PBOC Law and the Financial Stability Law.

Broader Context and Implications

These decisions come during a period of active policymaking at the State Council. Earlier in May, the council studied economic priorities and basic research (May 9) and reviewed urban renewal and agricultural modernization plans (May 15). The May 21 meeting represents the third major State Council session in two weeks, reflecting an intensive policy formulation pace.

The PBOC law revision, in particular, raises important questions about the central bank’s future mandate, policy tools, and governance structure. As the draft moves to the NPC Standing Committee for deliberation, market observers will be watching closely for specific provisions regarding the PBOC’s expanded post-2023 reform mandate, including its role in financial stability and regulatory coordination.

What to Watch For

The coming months will reveal critical details on all three fronts: the specific provisions of the revised PBOC Law, the implementation roadmap for unified national market regulations, and the investment and institutional changes required by the emergency system Five-Year Plan. These policy directions, set in the first year of China’s 15th Five-Year Plan, will shape the country’s economic governance and risk management framework for years to come.