The State Council executive meeting presided over by Premier Li Keqiang on Dec 16 decided to further streamline administration by “separating” business licenses from administrative permits to create a more favorable business environment.

Tests in Pudong New Area of Shanghai will allow some companies to get their businesses running without obtaining administrative permits, according to a statement released after the meeting.

“Setting up an enterprise requires not only a business license, but also getting approved from the government, which brings about low efficiency and does not benefit the enterprise’s growth,” said the Premier, calling to “further increase administration efficiency and create a more favorable business environment.”

When Premier Li visited the administration center in Shanghai Free Trade Zone on Nov 25, he asked the center to hand in a plan for separating the two procedures, and suggested that pilot reforms should be carried out in areas where they can be easily operated and managed.

The meeting on Dec 16 received the plans from the center, and decided that for some areas and sectors, administration permits will be repealed, simplified or replaced by handing in materials for the record.

The Premier said if the administrative perception could be adjusted, it will greatly boost the market vigor.

He asked related departments to further improve the supervision system, and combine the separation reform plan with supervision systems such as “double-notification” and “two-way random check “.

Simplifying administration and delegating power is a way to change government function from approval-focus to supervision-focus, and government officials should strength supervision to create a fair business market, said the Premier.

“We will further improve the supervision system through separating business licenses from administrative permits, and only a more complete supervision work can lead to more power being delegated,” he said.