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China to spur market vitality via integration of certificates

Hu Yongqi
Updated: Apr 26,2017 8:05 PM

China will continue integrating business certifications and licenses into one consolidated business license, in order to further reduce institutional costs for market entities and stimulate market vitality as part of the country’s business registration reform.

The decision was made at a State Council executive meeting, which was presided over by Premier Li Keqiang on April 26, where a guideline on its implementation was also approved.

With this policy in action, different certificates related to business registration will be sorted and merged into one business license, helping enterprises be ready for operations with no further delay once they obtain the license.

“We should focus on creating a globally competitive business environment and continuing the business registration reform. It’s to reduce institutional costs for enterprises and cultivate an inclusive and fair backdrop for mass entrepreneurship and innovation as more enterprises can be easily registered and flourish,” Premier Li said.

As a significant measure to boost supply-side structural reform and administrative reforms, the integration of certificates will further transform government functions and unleash benefits enabled by reforms, the guideline said.

The document required integration, simplification and elimination of certificates as much as possible, with a handful of exceptions involving safety and security concerns. Any enterprise-related certificates and licenses with no statutory foundation or those set without due legal procedures will be canceled.

The guideline is aimed at boosting inter-departmental sharing of basic and credit information of enterprises. Submitting identical registration information multiple times will be avoided. Integration of the internet with government services will be further boosted to improve efficiency in approvals.

Supervision will be strengthened to oversee registration and post-registration procedures with clearly defined departmental responsibilities, while a new supervisory mechanism will be established centering on corporate credits.

The document also encourages local governments to explore new ways in the integration process and boost assessment and rankings for local business facilitation in accordance with international benchmarks for business environment.

On Oct 1, 2015, China merged the business license, the organizational code certificate and the tax registration certificate into one.

One year later, the country added the social insurance registration certificate and the statistical registration certificate into the business license, a move that has significantly reduced institutional costs.

A State Council executive meeting on Oct 14, 2016, decided that more enterprise-related certificates will be integrated with the business license to facilitate business startups, boost social creativity and boost employment.

Further actions have been taken since to accelerate the process.

The Government Work Report that Premier Li delivered in March included the goal to promote mass entrepreneurship and innovation.

Premier Li said that the integration of certificates is an effective way to improve productivity. While numerous certificates still exist, related departments need to “give up petty benefits for greater achievements by adding more water to nourish fish in the pond”, the Premier said, using a metaphor for streamlining procedures to help businesses thrive. He also called for enhanced information-sharing and disclosure as much as possible.

More than 3.59 million new market entities were registered in the first quarter of this year, an increase of 19.5 percent from the same period last year, according to the State Administration for Industry and Commerce. Among them were 1.25 million new enterprises, up by 18 percent.

Premier Li said implementation is the key. “To ease burdens for enterprises and for the sake of the people, governments at all levels should focus on improving services and strengthening compliance oversight with a special focus on the last mile of service delivery,” he said.

The State Council executive meeting on April 26 also decided to change five business registrations from pre-setup approvals into post-setup approvals.