Hu Kaihong (host):

Good morning, ladies and gentlemen. Welcome to today’s policy briefing of the State Council. At a recent executive meeting of the State Council, we discussed building “sponge cities” and streamlining and delegation of power. I’m honored to have Lu Kehua, vice-minister of housing and urban-rural development, Liu Yuting, vice-director of the State Administration for Industry and Commerce, and Li Zhangze, spokesman for the Leading Group Office on Reform of the Administrative Approval System of the State Council, to brief you on these issues and answer your questions. Mr Lu, please.

Lu Kehua:

Good morning, everyone.

The CPC Central Committee and the State Council attach great importance to the construction of sponge cities. We are now speeding up the urbanization process and have made outstanding achievements in city construction, but the construction of buildings and roads has changed the cities’ natural ecology and hydrological features. Seventy percent of rainfall turn into runoff and needs to be discharged, and as a result, heavy rainfall can lead to floods in cities, and after the rainfall, cities immediately face drought, thus causing the deterioration of water ecology, water shortage and pollution as well as water safety issues. It will severely affect people’s lives and production, and the cities’ normal operation. Developed countries also went through such experiences in their urbanization process. In a timely manner, they adjusted their city planning and construction concepts and tackled those problems through a low-impact development mode, and sustainable drainage management and sensitive city planning.

The so-called sponge cities enable the vegetation, soil and wetland to play a full role in naturally purifying rainwater so that cities can absorb and release rainwater like a sponge, thus flexibly adapting to the change in environment and dealing with natural disasters.

In city development and construction, we need to build green roofs, low elevation greenbelts and rainfall collection and recycling facilities in order to enable buildings, living areas, streets, squares, parks, green fields, and drainage systems to absorb, store and slowly release rainwater. And in this way, we can effectively control the rainwater runoff, where light rain doesn’t lead to standing water and heavy rainfall to no floods.

At the request of the State Council, the Ministry of Housing and Urban-Rural Development released the Technical Manual on Construction of Sponge Cities, which is a compilation of domestic and foreign experiences, and set up training classes nationwide. Along with the Ministry of Finance and the Ministry of Water Resources, we carried out pilot projects in 16 cities this year, and the plan was well received by many regions. So far more than 130 cities nationwide have come up with their own construction plans, and at the provincial level, Jiangsu, Anhui and Liaoning have released guidelines aimed at constructing sponge cities.

The State Council executive meeting on Sept 29 deployed the construction of sponge cities, and requested five requirements: first is to collect and utilize 70 percent of the rainwater, with 20 percent of the urban built-up areas meeting targets by 2020, and the proportion will increase to 80 percent by 2030; second is to make the rainfall runoff volume control rate as a key index in city planning, and establish a rainwater drainage management system; third is to carry out the construction of sponge cities in new city districts, while coordinating with renovation of shantytowns, dilapidated buildings and old communities; fourth is to financially support the plan by adopting new modes to attract social investment; fifth is to let local governments and related departments participate fully in the development of sponge cities.

At present, we are refining detailed measures according to the requirements of the State Council, and focusing on implementation efforts with other ministries.

Hu Kaihong (host):

Thanks, Mr Lu. Now Mr Liu, please.

Liu Yuting:

Good morning, ladies and gentlemen. It’s my pleasure to have this opportunity to introduce the plan of regulation in and after the reform of getting administrative approval after receiving business licenses.

The plan for the regulation was passed at the 107th State Council executive meeting. Leaders of the State Council pay great attention to regulating such reforms, as Premier Li Keqiang said that “easy access and strict regulation” is crucial to the success of a commercial system reform when he visited the State Administration for Industry & Commerce in March.

The Premier demanded that we should strengthen coordination and regulation in and after the reform to avoid any regulation gap or “gray zone”.

At the second plenary meeting of the coordinating group under the State Council promoting the transformation of government function, Vice-Premier Zhang Gaoli asked that more efforts be made in studying the regulation plan. State Councilors Yang Jing and Wang Yong also held meetings aimed at strengthening regulation in and after the reform.

According to the directions from the State Council leaders, we drew up the plan, which was reviewed and passed at the 107th State Council executive meeting, on the basis of years of market regulation experience and opinions from government departments.

The plan, which serves as a guideline in the reform, focuses on regulation problems after the reform and releases details about administrative approval items, regulation duties, coordinated regulation, and public participation.

The plan clarifies regulation duties of government departments and spells out requirements on information sharing, departmental coordination, risk reviews, and credit constraint.

For information sharing and notification, the plan is to build a unified enterprise information platform that requires local governments to gather the real-time sharing of information on registration, administrative approval, and industry administrative departments for enterprises, and then make public the information.

The plan emphasizes credit regulation as limits or bans on bid and tender, border exit and entry, and government procurement will be implemented on discredited enterprises and individuals and those who break laws.

The plan also stresses the role of industry associations and professional service institutions, and public opinion.

After the 107th executive meeting passed the plan, we will further amend the plan and report to the State Council before publication and distribution.

Last, we appreciate the attention and reporting on the reform and regulation, and we welcome continuing focus from the media. Thank you.

Hu Kaihong (host):

Thank you Mr Liu. Now Mr Li, please introduce the progress of the reform of the administrative approval system.

Li Zhangze:

Good morning.

First, I would like to introduce our work on clearing up administrative approval items the central authorities have designated to local authorities for the latter to execute.

Since the 18th CPC National Congress, the central government has stepped up its efforts in streamlining administration and delegating power to lower levels, and successfully stimulated market vitality and socioeconomic progress.

Thanks to the administrative approval system reform in the past two years, the State Council departments have abolished or delegated more than one third of approval items, remarkably easing the problem of “excessive approval”.

Meanwhile, the local administrative approval system reform is pushing forward and as the reform goes further, parties involved have found that most of the approval items to be executed by local governments are set up by laws, regulations, State Council decisions or in other forms and thus local governments have no right to adjust them.

Considering this, we in the central government started to clear up such administrative approval items. The State Council heads attached great importance to the job and gave special instructions on advancing the task.

The work is very meaningful.

First, it’s a key step to deepen the administrative approval system reform. It will help untie and reduce the burden on businesses and society, stimulate private investment and mass entrepreneurship. It will also enable businesses and the masses to enjoy the benefit brought by the reform and substantially feel the effect of reform.

Second, it will open space for local reform. After canceling the designation of such administrative licenses, the central government may make more room for the reform of local governments. Local governments can keep some designated administrative approval items that are necessary, but should include them in local laws or regulations.

Third, it will make the administrative approval system reform more synthetic, holistic and better targeted. It will help the central and local governments interact and coordinate more smoothly.

Since the beginning of this year, we have stepped up efforts with relevant departments to clean up such items.

First, we have grasped how many such designated administrative approval items there are. We sorted out these items executed by the local governments of Beijing, Shandong, Guangdong and Ningxia, and came up with an initial list of which administrative approval items the central government would delegate to a provincial government. Then we handed out the list to each provincial government for them to review and revise it before we came up with a final version of the list.

Second, we reviewed and discussed the items on the list. We repeatedly solicited opinions from local governments, and had experts from various fields establish standards concerning which items should be canceled.

Third, we came up with plans to clean up items that need to be canceled. We put designated administrative approval items into two categories. One is those designated according to laws, regulations and by the State Council. The other is those designated only by ministries under the State Council. Then we decided which to cancel and which to keep.

On June 24 and 25, a panel under the State Council held a meeting to review the list and reported their decision. It was decided at an executive meeting of the State Council to first cancel 62 items on the list.

We will continue the process of reviewing and canceling such designated administrative approval items.

First, we will speed up researching and canceling such items batch by batch according to the law, regulations and the decisions by the State Council.

Second, we will cancel all the administrative approval items designated to local governments only by ministries under the State Council by the end of this year. If some of these items are necessary, relevant parties should go through legal processes to make them law.

Third, we will disclose in time on www.scopsr.gov.cn administrative approval items designated to local governments according to laws, regulations and by the State Council, so that the public can scrutinize them and share their opinions on which of them should and can be canceled.

Next I will introduce to you our work on clearing and regulating intermediary services related to administrative approvals executed by ministries and departments under the State Council.

In recent years, pre-review intermediary services, related to administrative review and approval, have played an important role in promoting government departments better performing their duties in accordance with the law, including, among other things, providing professional technical services for applicants.

However, some problems also arose, such as complicated and time-consuming processes, unreasonable charges, monopolies, and the interwoven interests between some intermediary service providers and certain government departments.

These are all offsetting the results of reform of the system concerning matters subject to administrative review and approval, adding to the burden of enterprises and the people, disturbing the market order, and even breeding corruption.

The Central Committee of the Communist Party of China and the State Council, therefore, attach great importance to regulating pre-review intermediary services, requiring the State Commission Office for Public Sector Reform and other institutions to work out and take targeted measures to regulate and guide the intermediary services to improve the situation.

In April 2015, upon approval from the State Council executive meeting, the Notice of the General Office on Clearing up and Regulating Pre-review Intermediary Services Related to Administrative Review and Approval from Departments under the State Council (GFB [2015] NO. 31, hereinafter referred to as the Notice) was issued.

The Notice sets out our measures in key aspects; reducing redundant steps, breaking up the monopoly and the connections of interest, introducing a system to list all items over which administrative review and approval are required, regulating charges, and strengthening supervision, targeting problems of complicated and time-consuming processes, unreasonable charges, entangled interests and monopoly.

After the Notice was issued, we held discussions with 60 departments under the State Council with functions related to administrative review and approval, to jointly work on specific requirements and goals in implementing the cleaning up and regulation. Meanwhile, we exchanged views with different departments respectively on the initial steps to improve the intermediary services. Through repeated discussions and exchanges, we have decided on the first 91 intermediary services to be cleared up and regulated (two of them will be publicized and regulated after related laws are revised), which have been approved at the State Council executive meeting on Sept 29. These services cover investment of market players, approval of construction projects and inspections covering the meeting of standards of enterprises and individuals. They involve 25 departments including the National Development and Reform Commission, and 53 items over which administrative review and approval are required. The action concerns steady economic growth, structural adjustments, reforms benefiting the people, and the direct interests of enterprises and the public. This has resulted in widespread public interest.

After the cleaning up and regulation, the items covered by those services are no longer required in administrative review and approval of departments under the State Council. Recommendations for cleaning up and regulating such intermediary services can be divided into categories. First, for 37 items, applicants are no longer required to provide related evaluation, argument, appraisal and certification. For example, proof of funds and capital verification report are still necessary for review and approval after an industry adopts subscribed capital registration system, applicants will not be required to provide these materials.

Second, for totally 15 items, applicants are not required to provide relative materials; instead, when necessary, review and approval departments can authorize specific organizations to provide technical services. For example, the review on the primary design documents of national key road construction projects will no longer require applicants to entrust intermediaries with the pre-review; instead, it is the transportation departments that will be responsible to entrust relative organizations with the pre-review.

Third, for 39 items, applicants are still required to provide relative materials, but they can compose these materials on their own or entrust relative organizations with the composition. Meanwhile, the existing technical review and evaluations by review and approval departments will be reserved. For example, in the review of nongovernmental investment project application reports, the applicants can either compose the report by themselves or voluntarily entrust engineering consultation agencies with the composition, and the government departments must not interfere. The existing procedures where the National Development and Reform Commission (NDRC) entrusts engineering consultation agencies with the evaluation of application reports will be reserved. In the process of review, we pay special attention to intermediary service matters related to public security. On one hand, we follow the clearing up and regulation requirements, and on the other hand, we exercise stronger oversight over clearing-up matters when they are being handled and after they have been handled. Next step, we will, according to the arrangements of the State Council and the Notice, continue to consult with relative departments on other intermediary service matters so as to further the clearing up. For matters that are still necessary for administrative review and approval, we will compose lists and release them to the whole society, so as to accept social oversight. Also, according to the arrangement of the Notice, the NDRC and the Ministry of Finance will put forward supporting measures to regulate intermediary service charges and improve systems for intermediary supervision.

The Ministry of Civil Affairs will put forward supporting measures to strengthen the self-regulation of industries. All review and approval departments of the State Council will improve the standards and requirements for the matters cleared up by them and exercise stronger oversight over cleared-up matters when they are being handled and after they have been handled, so as to ensure public security and the quality of review and approval.

For the reserved intermediary service matters, the departments will regulate the charges, optimize procedures, eradicate monopolies, cut off interest connections and strengthen industrial oversight. That’s all, thank you.

Hu Kaihong (host):

Now questions, please.

Guangming Daily:

Mr Lu, you mentioned that more than 130 cities in China have made plans for building sponge cities. So my question is, will there be a timetable for construction? What measures will the government take to ensure the implementation of the timetable?

Lu Kehua:

A guideline for pushing the construction of “sponge cities” has been approved at the State Council executive meeting, and will be published soon. Through the building of sponge cities, the target is to make sure 70 percent of the rainwater will be absorbed and utilized at local places.

We have made a timetable centered on such a target, namely, 20 percent of the built-up urban areas will utilize 70 percent of the rainwater by 2020, and the number is expected to reach 80 percent by 2030.

This is the government’s general target, and local governments can make their plans according to their situation, but their construction should be ahead of the national speed, not behind it.

China Central Television (CCTV):

Mr Liu, in order to ensure the implementation of getting administrative approval after receiving business licenses, could you please talk about how the industrial and commercial institutions will do their duties on “double-notification” during administrative approval?

Liu Yuting:

“Double -notification” mechanism is a measure the industrial and commercial institutions take to ensure the implementation of administrative approval reform. It means that the institutions will actively inform the applicants to get administrative approval after receiving a business license. It is also a measure for the industrial and commercial institutions to help the administrative approval departments to carry out the reform and achieve the orderly work between the two official bodies.

After applicants receive the business licenses, staffers from the registration institutions will inform them to get the administrative approvals as soon as possible if their business activity needs such approval procedures. Then the applicants will sign a letter of commitment to promise that they have learned about the related regulations and approval departments, and will not engage in business activities until they get the approvals.

After completing the registration, the industrial and commercial institutions will register the applicants’ information on their own system, and automatically inform the approval departments and publish them on the online enterprise credit information publicity system or share them on the online enterprise information platform.

China Radio International:

I have a question for Mr Li. You mentioned just now that during the government’s effort to streamline administrative approvals, a number of intermediaries, which are linked to the departments’ interest, will be regulated and sorted.

Are there measures to ensure that those intermediaries will not be continued or resurrected in other forms?

Li Zhangze:

I’d say it’s a good question, on which I can also see public concerns.

In the State Council document, we’ve set several rules targeting the problem.

First, all the public institutions and social organizations affiliated with the approving departments are required either to detach from those departments or to be restructured into companies.

Second, the approving departments are required not to designate intermediary organizations in any form, and should treat all organizations that provide intermediary services in the same manner.

Third, the approving department shouldn’t allow the same intermediary to access the application and do the technical review itself.

Fourth, all the trade union and associations that provide intermediary services should be detached from the government departments in charge of approvals. They should join the market competition like other intermediaries. Thus the benefit chain hidden among them can be cut.

Fifth, no government official will be allowed to take part-time jobs at the intermediaries. Retirees from the related departments can take the intermediary job only after approvals, and on the condition that they won’t get paid for that.

In addition, intermediaries are not allowed to access any existing or canceled administrative approvals.

We’ll strengthen supervision with the related departments, and we’re open to supervision from the general public.

Economic Daily:

Mr Li, what’s the impact of such clearing up on enterprises?

Li Zhangze:

The clearing up of administrative approval items designated by the central government and to be executed by local governments might still be new to you. Over the past two years, central departments have already canceled or delegated to the lower level over one third of the administrative approval items during the reform of the administrative approval system. Generally speaking, these items are related to certain groups of the public and are at a specific level. But this time, the items to be executed by local governments are large in quantity and closely related to the market and the public. Therefore, one benefit of the clearing up is that it will be easier for enterprises to get approvals. For example, one of the 62 items is about the approval on taxation preference policy. Once this item is canceled, there is no need for qualified companies to get approval for this policy. It will help to ease the burden on enterprises and increase the flow of money.

Second, we canceled a group of items that require preliminary approval from local governments before applying for approval of central departments. Some items that require three or more rounds of approvals only need approval from central departments now, which will save a lot of time.

Third, we have sought opinions from local governments, relevant institutions and experts during the clearing up. Special attention has been paid to items that are related to the current economic growth and to the benefit of investment. For example, we canceled an approval item about high-tech projects that once needed to be approved by the National Development and Reform Commission. Another item about tourism projects related to water resources, also, does not need approval from the water resources department. The cancellation of such items will help to ease the burden on enterprises and the whole of society, and it will also inspire the potential of private investment and boost mass entrepreneurship and innovation. The clearing up of administrative items is good news for companies.

China Central Television:

Mr Lu, do we have any specific and effective ways or measures to address waterlogging when building sponge cities? And Mr Liu, could you please introduce to us the running conditions of the Enterprise Credit Information Publicity System?

Lu Kehua:

There are many reasons for city waterlogging. Simply speaking, the water is too slowly drained. When too much water accumulates, waterlogging happens. There are two ways to avoid waterlogging. One is the traditional method of using a drainage system to drain off water. The rainwater must be drained as soon as it accumulates. But, the pipelines are often too small to drain a big volume of water after a downpour. This method is certainly not sustainable. Therefore, we should transform the concept and combine different measures together to enhance civic development.

What is the core of a sponge city? The essence is to reduce the amount of rainwater falling onto the underlying surface and absorb it. What can we do?

We should make efforts to improve the natural permeability of rainwater. In doing so we would not only avoid surface runoff and reduce the amount of rainwater flowing to pipelines from roads, but also conserve and purify underground water thus improving the urban microclimate. It is the most important measure.

We should keep rainwater where it falls. For example, rainwater may fall into a lake or channel, but if humans disturb it, it converges to cause waterlogging. Retaining rainwater where it falls is also a way to use it.

We should reduce runoff volume. Strong rainfall often occurs in a city in a short time to form rapid runoff, but, we can change the microtopography so that rainwater can be made to converge to the same place gradually. Waterlogging can be avoided if the water flows slowly.

We should purify water. The first rainfall in a city is very dirty. If such dirty water drains into rivers and natural waters, it causes pollution.

We should also use the rainfall. We should use more rainwater no matter where it falls. For example, for rainwater in a parking lot, the traditional way is to drain it off quickly, but couldn’t we collect and purify it, and use it to do car washing? We often use tap water to water the flowers and trees, which consumes both energy and water resources. However, we could keep the water and purify it at the same place.

Of course, we have to drain rain water. In some cities, water cannot be absorbed and used easily, and waterlogging happens. Thus, it is necessary to take artificial measures to drain the water.

To address urban waterlogging, we have to combine human and natural measures, ecology and projective measures taken both on the ground and underground. With these measures, we can improve water quality and adjust the microclimate. Therefore, building a sponge city is not only a clear goal, but a comprehensive one.

Liu Yuting:

Thank you for asking about the Enterprise Credit Information Publicity System.

The Enterprise Credit Information Publicity System was established in accordance with the Plan on the Reform of Registered Capital Registration System and Interim Regulation on Enterprise Information Disclosure. It is a system used to publicize enterprise credit information.

The publicity system throughout the country is running stably. Any organization and individual can log on to view registered information and annual reports. The number of system views is increasing continuously. The market entity is more willingly and actively publicizing information. The publicity system is widely used by lawyers, intermediary organizations and credit investigation organizations.

To date, the industrial and commerce department has publicized information on 21.5451 million registered enterprises. 12.1903 million enterprises have publicized their 2013 annual reports and 14.8249 million enterprises have publicized their 2014 annual reports. 3.1358 million enterprises have been included on the abnormal operating enterprise list because of failing to disclose information. Up until Aug 31, 2015, 2.9717 million enterprises have publicized 6.2725 million instant information. Visits to the system have been 3.722 billion and inquiries have reached 1.653 billion.

Hu Kaihong (host):

That’s all for today’s policy briefing. Thank you all.