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China makes greater efforts to improve business environment

Xu Wei
Updated: May 2,2018 9:28 PM

China will further improve its business environment by halving the time required to open a business and start construction projects, the State Council decided at an executive meeting chaired by Premier Li Keqiang on May 2.

According to a decision at the meeting, the length of time required to start a business in municipalities, sub-provincial cities and provincial capitals will be reduced from an average of more than 20 workdays to 8.5 by the end of the year. This measure will also be introduced in five leading cities, Dalian, Qingdao, Ningbo, Xiamen and Shenzhen, with other areas also set to see positive progress, to be followed by national implementation in the first half of next year.

Measures to halve the time required for government approval of construction projects from the current average level of more than 200 workdays to 120 will be piloted in 15 cities, including Beijing, Shanghai and Tianjin, and in Zhejiang province, this year, whereby all government review items and approval procedures concerning home building and urban infrastructure will be simplified, optimized and standardized. This pilot program will be rolled out nationwide in the first half of next year.

President Xi Jinping emphasized that we must do away with regulations and practices that impede the development of a unified market and fair competition, stimulate the vitality of all market entities and adopt policies to promote high-standard liberalization and facilitation of trade and investment.

Premier Li said that a good business environment is part and parcel of enhancing competitiveness and productivity. “In spurring economic growth, our focus needs to shift from investing in projects to improving the business environment. The key is to press ahead with the reform of government functions,” he said.

An estimate by the World Bank moved China up 65 spots between 2013 and 2017 in the ranking of ease of starting a business, and the length of time required was shortened from 33 days to 22.9.

According to a decision at the meeting, the procedures that a new firm needs to go through to become initially operational will be further streamlined. The whole business registration process will be conducted online. Government approval of business names before registration will no longer be needed unless specifically required.

The record-filing procedure for official seals will be included in the reform to integrate different certification requirements for business registration. Applicants may also choose their own providers for official seals.

No separate tax registration will be required, and no separate social insurance registration certificate issued for companies that have obtained business licenses with unified social credit codes. The amount of time needed for invoice application and social insurance registration will also be reduced.

“An enabling business environment that unlocks market vitality is crucial to achieving sustained, high-quality development in China. The biggest potential for our development lies in the vast domestic market and the creativity of all market entities,” Premier Li said.

“Reducing government-imposed transaction costs will be the priority of the reform of government functions going forward, and there is still a great deal that can be done in this respect. The government must continue to make determined efforts to cut red tape, enhance compliance oversight and provide better services,” he said.

To slash the review time for construction projects, the following measures were decided at the meeting:

First, the number of items subject to government approval will be further simplified. The record-filing requirement for construction contracts and building efficiency design review will be eliminated, and designs for fire control and civil air defense will be incorporated into the construction plan documents for review.

The review and approval of a project will no longer be conditional on environmental impact and energy efficiency, which will instead be subject to general assessment by the government.

Second, category-specific management will be introduced. The approval procedures for privately invested small and medium-sized construction projects will be simplified. No government approval will be required for the design plans of land-use right transfer projects with existing development plans. For privately invested home building projects, the project proprietors may decide how to award their own contracts.

Third, procedures will be streamlined. An interagency approach with a clear time frame will be adopted for simultaneous site inspection, mapping, surveying and drawing inspections by competent authorities in planning, natural resources and urban utilities. So in the future, the government will formulate one single checklist laying out all construction requirements, one single system for approval and inspection services, one single window for multiagency services, one single form for application materials and one single mechanism for rules-based approval.

“The rebound in private investment this year has been encouraging, yet lengthy reviews for construction projects will drive up corporate costs,” Premier Li said.

“Reform must be pushed forward by breaking down the departmental barriers of vested interests. We will advance these reform measures step by step and keep in mind the realities on the ground, and work to roll them out nationwide next year.”