Beijing. 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 (03/07).

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.

Reuters