China has recently unveiled a guideline aimed at improving the system for market-based allocation of resources and environmental factors, amid the country's efforts to speed up the overall green transition of economic and social development.

The guideline is jointly issued by the General Office of the Communist Party of China Central Committee and the General Office of the State Council.

The guideline outlines measures to deepen reforms in the trading of resources and environmental factors, including improving quota allocation systems, expanding the scope of tradable elements, strengthening trading mechanisms, and enhancing foundational capacities.a

By 2027, China aims to establish basically sound trading systems for carbon emission rights and water use rights, while further refining mechanisms for the trading of pollutant discharge rights, per the guideline.

By then, the market-based energy-saving mechanism will be further improved, and the trading of resource and environmental factors will become more active, supported by a better price formation mechanism, according to the guideline.

Despite resource scarcity and limited environmental capacity -- China's fundamental conditions -- the country has made significant strides in addressing these constraints through market-based mechanisms, according to an official of the National Development and Reform Commission.

China has established a national carbon market, a voluntary greenhouse gas emissions reduction market and a water right trade exchange, while also piloting various local trading schemes to promote the market-based allocation of resources and environmental factors.

The new guideline is expected to help direct the orderly flows of resources and environmental factors toward green and low-carbon development, and to support the cultivation of new quality productive forces, the official said.