China announced on Thursday that it is finally putting an end to its 2,000-year-old state monopoly on the salt industry and will liberalize price control starting next year as part of the country's state reform.

Under the new policy, licensed salt producers can now decide on their own scale for production and distribution. They can now sell salt directly to different regions or other distributors instead of selling only to state distributors, according to China Daily. Moreover, the market will now determine the prices of all salt-related commodities.

Like Us on Facebook

The government will no longer issue new licenses for edible salt producers. Instead, private investors can team up with existing salt firms to get into the market.

Furthermore, the new policy prevents provincial-level salt wholesalers from selling salt outside their respective boundaries. Small-scale salt businesses are also allowed to sell to various markets within their jurisdictions.

Although there is more freedom under the new policy which will take effect on Jan. 1, 2017, the government still has the responsibility of ensuring that more than 90 percent of good quality iodize salt reach the market. It also plans to establish a salt reserve that could hold a month-long supply of edible salt.

According to The Wall Street Journal, even though the overhaul does not "do away with the monopoly... it does attempt to give market forces greater sway."

"It's a milestone for China's salt reform. The removal of state controls over price and distribution is big process for the industry," Zou Jialai, a lawyer said.

Tagschina, Salt monopoly, salt