BEIJING, July 4 (Reuters) - China’s economic planner has set new guidelines for authorities on how to set policy for the country’s booming “sharing economy,” in an effort to remove barriers and better regulate an industry deemed an important new driver of economic growth. China’s “sharing economy” is expected to grow about 40 percent this year to 4.83 trillion yuan ($705 billion). By 2020, it could account for around one tenth of China’s gross domestic product. The explosive growth of the sector has been seen in the large spurts of funding Chinese bike-sharing firms such as Mobike and ofo have received. But the relatively new industry faces growing challenges, such as regulatory frameworks that fail to keep apace of advances in technology and insufficient social security provided for contractors and freelancers, China’s economic planner said in a statement posted on its website late on Monday. Existing restrictions on market entry should be further relaxed or eliminated, while new policies should be launched with caution, the department said. “We should avoid using the old method to regulate a new format of business and we should break down industry and geographic barriers for it,” it said, adding that governments should step up regulatory control and increase policy transparency. The guidelines also urged local policymakers to crack down on intellectual property right violations, better protect consumer rights, and enhance contract workers’ social security. The statement was co-issued by eight central government entities, including the National Development and Reform Commission, Cyberspace Administration of China, Ministry of Industry and Information Technology, and Ministry of Human Resources and Social Security. (Reporting by Yawen Chen and Ryan Woo; Editing by Sam Holmes)
China has set a new framework on how to create policy for the country's surging sharing economy, with a view to regulate a sector that is expected to be a leading force of economic growth. The country's sharing economy is expected to grow about 40% to $705bn this year, and potentially make up eight of China's GDP by 2020. The department of economic planning has said that restrictions on market entry should be relaxed or eliminated, while any new regulatory policies should be launched with caution. Meanwhile, the guidelines also suggest that local policymakers should not tolerate intellectual property violations, should protect consumer rights, and should look to enhance contract workers' social security.