It is reported that, During the 14th Five-Year Plan period, the development of the circulation system will focus on four key areas: fostering a favorable circulation environment, optimizing spatial planning, nurturing market entities, and elevating the level of modernization. Specifically, this entails developing an orderly and efficient modern circulation market to create a conducive business climate; building a modern circulation network that ensures smooth domestic flows and robust external connectivity while refining its spatial layout; and cultivating high‑quality, innovative modern circulation enterprises to establish market players with international competitiveness. Body; accelerate innovative green development and enhance the modernization of the circulation system.

At the end of January 2022, the “14th Five-Year Plan for Building a Modern Circulation System,” jointly formulated by the National Development and Reform Commission in collaboration with the Ministry of Transport, the Ministry of Commerce, and other departments, was officially released to the public.

An official from the Economic and Trade Department of the National Development and Reform Commission stated that advancing the development of a modern circulation system is of great significance for fostering a comprehensive domestic demand framework, promoting the formation of a robust domestic market, and ensuring the smooth functioning of the national economic cycle. “As the first five-year plan in the modern circulation sector, the Plan lays out a strategic framework and a systematic blueprint for building a modern circulation system, sets forth a series of concrete, implementable priority tasks, and holds groundbreaking significance for ensuring the smooth functioning of economic cycles.”

Clearly define the priorities for development.

Circulation connects production on one end and consumption on the other, playing a crucial foundational role in the national economic cycle. From the perspective of China’s actual conditions, the modern circulation system does face certain pressing shortcomings and weaknesses; meanwhile, from the standpoint of future development, building such a system is a strategic imperative for forging a new development paradigm.

Yi Shaohua, Director of the Market Circulation and Consumption Research Office at the Institute of Financial Strategy of the Chinese Academy of Social Sciences, argues that an efficient, modern circulation system can link production and consumption on a broader scale, expand the scope of trade, and deepen the division of labor. By participating in global economic governance through value chains and industrial chains, it can achieve the effective allocation of both domestic and international markets and resources, thereby synergistically advancing the development of a robust domestic market and a trading powerhouse.

At present, the modernization of China’s circulation system remains limited, with numerous weak links still in place. On the one hand, the free flow of goods and production factors continues to face implicit barriers, the development of rules and standards lags behind, and a fully integrated national market is yet to be established. On the other hand, traditional commerce and trade urgently require transformation, agricultural product distribution needs upgrading, and new drivers for foreign trade must be fostered more rapidly. Meanwhile, transportation and logistics infrastructure remains inadequate, network interconnectivity is insufficient and unevenly distributed, and critical areas such as emergency logistics and cold-chain logistics still have significant shortcomings. Furthermore, difficulties and high costs in obtaining financing within the circulation sector persist, and the level of credit information utilization continues to need improvement.

It is reported that, During the 14th Five-Year Plan period, the development of the circulation system will focus on four key areas: fostering a favorable circulation environment, optimizing spatial planning, nurturing market entities, and elevating the level of modernization. Specifically, this entails developing an orderly and efficient modern circulation market to create a conducive business climate; building a modern circulation network that ensures smooth domestic flows and robust external connectivity while refining its spatial layout; cultivating high‑quality, innovative modern circulation enterprises to forge internationally competitive market players; and accelerating green and sustainable innovation to raise the overall modernization of the circulation sector.

Enhance distribution efficiency

China’s economy is vast and deeply diversified. Under the new development paradigm, the scale, structure, and spatiotemporal distribution of production and consumption are set to undergo significant changes. These shifts create historic opportunities for a broader range of regions and more economic actors to participate in the economic cycle and modern circulation systems. At the same time, it is important to recognize that, over a certain period, as the geographical scope of circulation expands, goods and resource factors may become more dispersed, thereby diminishing economies of scale.

Zhang Guohua, Deputy Director-General of the Economic and Trade Department of the National Development and Reform Commission, stated that to promote the circulation of the national economy, enhance distribution efficiency, and reduce distribution costs, it is necessary to leverage the modern circulation system’s advantages in scaling up the organization of goods and resource factors, while simultaneously advancing the coordinated development of interregional circulation infrastructure networks and organizational operating models.

During the 14th Five-Year Plan period, on the one hand, a number of modern strategic hub cities will be strategically developed, featuring concentrated circulation factors, well‑equipped logistics infrastructure, and rich application scenarios for new technologies, business forms, and models. On the other hand, several key circulation corridors will be established, characterized by efficient interconnectivity of facilities, deep integration between production and sales, and close division of labor and collaboration. Accelerating the development of a modern circulation network composed of “hub cities plus backbone corridors” is of paramount importance.

Deepening market‑oriented reforms in modern circulation is one of the key tasks in building a modern circulation system. To promote the efficient flow and allocation of goods and production factors, the Plan calls for: first, accelerating marketization in priority areas of modern circulation; second, enhancing the capacity to allocate critical resources; and third, improving integrated, interconnected rules and standards. It also emphasizes formulating and revising circulation rules and standards that are well suited to China’s national conditions, leveraging the active roles of intermediary organizations, industry‑technology alliances, and leading core enterprises, and strengthening the application of these rules and standards across the circulation sector.

Meanwhile, improving market access and the fair competition regime is… An important component of the modern circulation system construction during the 14th Five-Year Plan period. We will optimize business processes under the “One-Network-Access” and “One-Window-Completion” models, deepen the reform of separating licenses from permits, substantially reduce administrative licensing requirements for intermediary services in the circulation sector, and develop a comprehensive list of qualifications and credentials applicable across the circulation field, thereby enhancing the quality of commercial services. At the same time, we will strengthen law enforcement against monopoly and unfair competition, implement the detailed rules for fair‑competition reviews, and safeguard a fair and competitive market order.

Reduce social costs

As an essential component of the modern circulation system, the commerce and trade distribution network plays a vital role in invigorating markets, boosting consumption, improving people’s livelihoods, and creating employment. Data show that, In 2021, the value added of the wholesale and retail trade sector increased by 11.3% year on year, driving the recovery of the service sector.

Yin Hong, Deputy Director-General of the Department of Circulation Development of the Ministry of Commerce, stated that, During the 14th Five-Year Plan period, the development of the commerce and circulation system will place equal emphasis on both hardware and software, and prioritize quality over mere scale.

From the perspective of the network layout of commerce and trade circulation, emphasis is placed on aligning with industrial development plans and transportation strategies, with rational placement of commodity distribution centers and trading markets to address key bottlenecks in agricultural product logistics. At the same time, initiatives are being implemented to promote high-quality development of commercial and logistics sectors, enhancing urban–rural delivery networks, advancing standardization in commerce and logistics, fostering regional logistics integration, and driving cost reductions and efficiency gains across the supply chain.

From the perspective of upgrading distribution infrastructure, in rural areas, it is necessary to improve the county-level commercial network, promote the extension of enterprise supply chains, logistics and delivery services, as well as goods and services to lower-tier markets, and establish a robust three-tier logistics and delivery system spanning counties, townships, and villages. In urban areas, the focus should be on encouraging large chain retailers to expand into communities, leveraging their scale to support smaller businesses and create convenient 15-minute living circles.

In addition, we should encourage and guide commerce and distribution enterprises to seize the new opportunities presented by the development of modern information technologies, accelerate digital and intelligent transformation and cross-sector integration, actively develop new business forms, models, and scenarios, and vigorously promote green logistics, thereby driving both consumption and industrial upgrading.

Guan Lixin, deputy director of the Institute of Circulation and Consumption at the Research Institute of International Trade and Economic Cooperation of the Ministry of Commerce, stated that the development and innovation of commercial circulation have expanded consumers’ options, making consumption more diversified and convenient, while also enhancing the efficiency of commodity exchange and reducing transaction costs across society.