It is reported that China Grain Reserves Corporation (CGRC) is implementing the overall incorporation of China National Cotton Reserves Corporation (CNCRC).

In this regard, ANBOUND's research unequivocally points out that this is the path taken by the central enterprises to replace reform with merger.

The success of the merger of these two central enterprises lies with whether there will be further reform to the reserves system.

Currently, not only that the reserves system is arbitrary, it also fails to discern the market failures, blurring the boundary between market and government, resulting in too much market intervention by the authorities.

Therefore, the future policy on the reserves system should be closer to the market and more importantly, it should be predictable so that the market can play a decisive role in the allocation of resources.