---
title: "Cross-province salt trade nationwide chaos, urgent need to break through 'interest' barriers"
description: "Since January 1 this year, China's salt industry system reform has entered the implementation stage, lifting price controls and allowing cross-province salt sales. However, contrary to expectations, salt prices have not fallen, and cross-province operations have been obstructed in many provinces. On April 11, media reported that China Salt Shanghai Company sued Jiangsu Salt Bureau over a list of enterprises allegedly violating regulations."
author: "金晓岩"
publisher: "New Distribution"
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published: "2017-04-15"
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# Cross-province salt trade nationwide chaos, urgent need to break through 'interest' barriers

> Since January 1 this year, China's salt industry system reform has entered the implementation stage, lifting price controls and allowing cross-province salt sales. However, contrary to expectations, salt prices have not fallen, and cross-province operations have been obstructed in many provinces. On April 11, media reported that China Salt Shanghai Company sued Jiangsu Salt Bureau over a list of enterprises allegedly violating regulations.

Since January 1 this year, China's salt industry system reform has entered the implementation stage, lifting price controls and allowing cross-province salt sales. The original vision was that this system would bring competition to the salt market, but the reality is contrary. Currently, the new policy has been implemented for more than four months. According to market feedback, not only have salt prices not fallen, but cross-province operations have also been obstructed in multiple provinces, with goods being seized. On April 11, media reported that China Salt Shanghai Company sued the Jiangsu Salt Bureau, requesting the court to rule that a list of enterprises allegedly involved in illegal salt operations issued by the bureau was illegal. Why does this phenomenon of 'defying the ban' occur? Who is behind it? How can the years-long cross-province operation barriers be broken?

Cross-province operations obstructed
According to incomplete statistics, since the policy was formally implemented in January this year, more than 8 provinces including Jiangsu, Hubei, Guizhou, and Henan have seen seizures of salt from other provinces. A total of 8 salt companies, including China Salt Shanghai Company, China Salt Dongxing Company, and Chongqing Salt Industry Group, have had over 2,000 tons of goods seized by local salt departments. Some salt enterprises have been seized hundreds of times. Additionally, according to reports from multiple salt enterprises, they have experienced warehouse doors being pried open for seizures, and trucks being fitted with GPS trackers. Seizure locations range from salt enterprise warehouses to terminal retail points. Seizure methods include temporary registration and preservation, and some direct confiscation.

For example, branches of the state-owned China National Salt Industry Corporation, such as Shanghai, Dongxing, and Yulin, have been seized 137 times by departments including the Chengcheng County Salt Administration in Shaanxi and the Xuyi County Salt Administration in Jiangsu, totaling over 1,026 tons of salt. Chongqing Salt Industry Group's salt was seized by Zunyi City Salt Administration in Guizhou, Tongren City Salt Administration, and Yichang City Salt Administration in Hubei, totaling about 429 tons. Hubei Lantian, also a subsidiary of Hubei Salt Administration, had nearly 500 tons of salt seized by Jiangsu Salt Administration.

Among these, a list of sealed and seized illegal salt items was obtained, dated April 6, issued by Huojia County in Xinxiang City, Henan. The reason for seizure was written as 'white particles in small plastic bags inside cardboard boxes.'

According to a relevant person in charge of the China Private Salt Industry Association, the salt reform is now at a bottleneck, with provincial salt departments cracking down on out-of-province enterprises. Even China Salt has not been spared.

At the end of last year, the National Development and Reform Commission (NDRC) and the Ministry of Industry and Information Technology (MIIT) jointly issued the 'Notice on Strengthening the Management of Salt Monopoly during the Transition Period of Reform' (hereinafter referred to as the 'Notice'). The Notice stipulates that provincial-level salt wholesale enterprises can stock goods across provinces, and sub-provincial salt wholesale enterprises can stock goods across regions within the province. Salt production enterprises with wholesale licenses can carry out salt sales activities through self-built logistics systems and other means.

Wang Qiang, inspector of the Economic System Reform Department of the NDRC, said in an interview with the media that in fact, salt production enterprises with provincial wholesale licenses, after filing with the provincial salt administration in the sales destination and operating through relevant methods, should not be obstructed in selling salt across provinces.

Since the new salt reform policy is 'escorted' by relevant national authorities, why is cross-province operation still being obstructed?

After salt reform, local salt enterprises' gross profit halved
Currently, seizures of out-of-province salt products are common, and the reasons are varied. Some say cross-region operation is not standardized because the newly implemented 'Salt Industry System Reform Plan' does not yet support sub-provincial salt enterprises in cross-province operation. Others cite salt safety issues, labeling cross-region salt as 'iodine-free salt' or 'industrial salt'. Some salt bureaus use the 'transport permit' issue to block foreign enterprises in salt circulation.

However, the seized salt enterprises do not think so. According to an insider, the salt enterprise seized in Huojia County, Xinxiang City, Henan, had complete procedures, including salt retail licenses, formal contracts, and invoices.

Overall, there is often a significant divergence between salt enterprises and salt administration regarding the seizure of salt. Salt administration departments believe that the seized salt production enterprises are exploiting loopholes in the policy transition period, while salt production enterprises believe that the salt administration is using law enforcement as a pretext to protect local interests.

Wang Qiang believes that in practice, some salt production enterprises do have violations, such as franchising or transferring wholesale. But relatively speaking, the phenomenon of local salt administration departments setting up various administrative barriers is more prominent.

In this regard, the above-mentioned person in charge of the China Private Salt Industry Association also said: 'Now the salt sellers are still the law enforcement departments. When other salt enterprises operate across provinces, the law enforcement departments think their interests are being touched.'

A salt industry practitioner calculated an account for reporters. Taking one ton of ordinary iodized salt as an example, before and after the reform, its retail price is about 4,000 yuan, but relying on monopoly, local salt companies can obtain nearly 3,000 yuan in gross profit. After the reform, these salt companies have to participate in market competition, and their profits have decreased by nearly 1,500 yuan.

Local laws urgently need improvement
Although the nearly decade-long salt monopoly reform finally began implementation on January 1 this year, the problems in the implementation process cannot be underestimated. This is evident from the obstruction of cross-province operations.

Song Zhanjing, secretary-general of the China Salt Industry Association, said in an interview with relevant media that the problems encountered in the implementation of the salt reform policy are related to the ongoing revision of laws and regulations. 'There is no authoritative interpretation yet, so it is difficult to determine whether it is illegal or not on these issues.'

Industry insiders believe that various policies such as local administrative licenses and local food circulation licenses, which seem reasonable on the surface, actually become obstacles to cross-province salt sales. If these obstructions are not removed, the national salt reform policy will be difficult to implement. Therefore, how to define these local regulations and how to straighten out the coherence and operability from national laws and regulations to local regulations are urgent issues that need to be solved in the salt reform.

It is understood that there are currently more than 170 salt production enterprises nationwide. With intensified competition, market-based elimination and reshuffling will accelerate. In this process, if local salt bureaus cannot be separated from salt companies, and the relationship of 'one prospers together, one suffers together' cannot be changed, it will intensify contradictions in the reshuffling process and delay the salt reform process. In fact, the obstruction of cross-province operation harms not only the interests of salt enterprises. As is well known, the two biggest features of the new salt policy are the cancellation of price controls and the liberalization of salt circulation. Among them, maintaining circulation is the prerequisite. Only when salt can circulate freely can prices fully reflect market conditions.

The above issues have also received attention from national authorities. On April 7, the NDRC and MIIT issued a 'Notice on Further Implementing the National Salt Industry System Reform', which mentioned that all provinces, autonomous regions, and municipalities should, based on local conditions, carry out special actions to implement the salt reform cross-region operation policy in three stages: self-inspection and self-correction, rectification and standardization, and summary and acceptance, to be completed by June 30, 2017.

**Source: China Times, Reporter: Jin Xiaoyan**
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