The National Development and Reform Commission (NDRC) said on July 16 that the recently issued reform plan on improving the exit mechanism for market entities is aimed at unclogging exits for and lowering withdrawal costs for market players and speeding up the exit of inefficient ones in China.

The reform intends to stimulate the competitive vitality of market players amid boosting high-quality development, according to NDRC.

The withdrawal mechanism of market entities is an important part of a modern economic system, NDRC spokesperson Meng Wei said at a news conference on July 16.

Building and enhancing a market exit mode will help deepen supply-side structural reform and form an institution environment in favor of optimizing existing capacity, preventing and resolving overcapacity, and phasing out zombie enterprises, Meng said.

The plan includes upgrading the bankruptcy system to meet the demands of economic and social advancement, thus improving the business climate, she said.

Meng added that optimizing the market exit mode, enhancing related procedures and improving the efficiency of exits will contribute to improving the socialist market system.

According to the plan, China will establish a convenient, efficient and orderly market exit mechanism for all sorts of market entities based on market-oriented reform and rule of law.

Meanwhile, the mode will look to balance incentives with restraints, and insist on protecting the reasonable rights and interests of all parties. Market mechanisms will work effectively, while macro-control will be maintained within a sound range.