Market System Building for Accommodating Circular Economy in China

摘要

China regards circular economy as the most important pathway to transform its economic growth pattern and to achieve sustainable development. However, the conflicts and collisions between ideality and reality profoundly reflect the incompatibility of circular economy to the current immature market. The government is accustomed to promoting circular economy with command-and-control methods,and places too much emphasis on techniques rather than institutional arrangement. The compatibility between circular economy and market is ignored. However the circular economy could only be realized in the market.Because of obvious externalities, circular economy fails to grow spontaneously in a completely free market. Through the market restructuring and institutional arrangement,circular economy would eliminate market failures and externalities of economic activity.Therefore, this paper gives some conclusions on how to arrange the institution in favor of the restructuring process. Aiming at eliminating the incompatibility between circular economy and current market, six key institutions are proposed to systematically promote the market's restructuring and the formation of a '3R' market.