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The government should not extend preferential policy treatment to large-sized enterprises alone, says a signed article in China Youth Daily. An excerpt follows:

In a latest round of medicine bidding in the coastal city of Yantai, Shandong Province, many small-sized medical corporations complained of unfair procedures and assessment standards in the process, which, they said, helped powerful medicine manufacturers win the bidding.

Facing their complaints, an official from the city's health authorities, however, argued that it was reasonable for the government to bolster those larger and more powerful enterprises that have contributed more taxes to local revenues.

It is common sense that large and powerful enterprises, due to their advantages, usually enjoy more development opportunities in the market. With preferential support from the government, other smaller ones would be in a more disadvantageous position with them. As a result, competition is weakened and market monopoly formed.

Medicine bidding is aimed at lowering medicine prices and raising their quality to benefit the public. Only fair market competition among all producers can help realize this objective.

It is also common that in developed countries, medium and small-sized enterprises are usually the target of preferential policy support to prod market competition and maintain economic vigour.

It is well known that one of the functions of a modern government is to build and maintain an orderly market mechanism for fair competition. In the latest medicine bidding in Yantai, what local authorities should do is to ensure a fair and reasonable bidding procedure so that all bidders enjoy an equal chance. Any man-made measures and policies that squeeze the development room of small enterprises are unfair to them.

(China Daily April 17, 2006)