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China goes further to cut red tape to aid business

Xu Wei
Updated: Sep 6,2017 10:07 PM

China will continue streamlining administration approvals and reducing red tape to improve the business environment, a State Council executive meeting, chaired by Premier Li Keqiang on Sept 6, decided.

The government will expand a pilot reform already being tested in the Shanghai Pudong New Area that allows for separate applications of business licenses and administrative approvals involving 116 approval items, to 10 free trade zones across the country, including those in Tianjin, Chongqing, and Liaoning and Zhejiang provinces. Provincial governments are authorized to extend the measures to eligible national-level new areas, innovation demonstration zones, high-tech industry zones and economic and technology development zones.

A reform priority is to consolidate or standardize the applications for various approvals, with many of them canceled outright, while some others switching to record keeping or commitment and filing practice.

The government will improve the transparency and predictability of policies and provide standardized services, making sure enterprises file records and fulfill their promises in accordance with industry standards.

“Cutting red tape, enhancing compliance supervision and improving government services is a major measure to transform the government function and advance supply-side structural reform. This government has prioritized the reform on approvals and the business registration system, which in essence is to develop a fair and unprejudiced market environment. And our efforts are paying off,” Premier Li said.

Coupled with the latest measures, the government has cut administrative approval by 697 items since taking office in 2013. Statistics show that the country had 2.91 million newly registered businesses in the first half of 2017, up by 11.1 percent year-on-year.

The meeting also decided to step up regular oversight during the pilot reform process, with more efforts going to spot checks, self-inspections inside sector associations and credit rating practices to enhance compliance oversight.

Sharing basic information of residents, enterprises and social organizations among government departments will be boosted to avoid unnecessary submission certification and screening redundancies.

“Government departments must be open-minded. Due approval procedures are necessary, but they are not a panacea, especially in terms of compliance oversight. We should keep working on the application of the principle, which is that the responsibility of oversight lies in those who give the approval and those in charge,” Premier Li said.

To further spur market vitality and encourage entrepreneurship and innovation, the meeting decided that the government will cancel 52 administrative approvals by central government departments.

The approvals are mostly related to employment and entrepreneurship, investment and doing business. Some of them are no longer necessary, given mature market conditions that can self-regulate. Cancellation of the approvals would enable the government department to transform their functions to developing industry standards and performing compliance oversight. Some approvals overlap, and their cancellation would reduce red tape and the burden on enterprises.

Also at the meeting, it was decided that 22 administrative approvals that had been delegated to lower levels of government would be canceled, most of which also pertain to enterprise operation, innovation and entrepreneurship. Some of the approvals canceled also overlap.

“We need to take concrete measures to ensure the reform measures are implemented in full, create a fair and unprejudiced environment, and benefit the life of the public, their entrepreneurship endeavors and the operations of businesses,” Premier Li said.