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China to further cut red tape to invigorate the market

Zhang Yue
Updated: Feb 20,2019 10:40 PM

China’s central government will eliminate or delegate to lower-level authorities more items that require government approval, and implement nationwide the reform of the construction project reviewing system, the State Council’s executive meeting chaired by Premier Li Keqiang decided on Feb 20.

The Chinese government has put high importance on transforming government functions by streamlining administration, delegating powers, enhancing oversight and providing better services. President Xi Jinping underlined the need for administrative streamlining by minimizing the government’s micromanagement and reducing the number of items that require administrative approval. Premier Li Keqiang stressed the importance of deepening the reform of transforming government functions, especially by delegating administrative powers. He called for a thorough evaluation of all government review items to see that all existing review items that can be eliminated or delegated to lower-level authorities be duly dealt with, except for those involving national security and major public interests.

At a press conference held last March after the closing of the NPC session, Premier Li said that the Chinese government will strive to halve the time required for starting a business and for reviewing a project in 2018, as part of the endeavor to streamline administration.

“Streamlining administration is as important as tax cuts in stimulating market vitality as we tackle the current downward economic pressure. The key task for the government is to foster a better business environment to energize all market players,” Premier Li said at the meeting. “This will be our important measure for sustaining steady economic growth this year.”

It was decided at the meeting that 25 administrative approval items, including pre-approval of corporate names before business registration and preliminary review of domestically produced medicines will be canceled. Six administrative approval items, including the practicing registration of some professions, will be delegated to government departments at or below the provincial level.

“Our reform to transform government functions affects the vested interests of government departments. However, administrative streamlining is a must, as excessive and cumbersome reviewing requirements would drive up institutional transaction costs and dampen market vitality,” Premier Li said. “Meanwhile, the government must enhance oversight and improve services. Its focus should shift to setting rules and standards.”

It was also decided at the meeting that pilot reform of the reviewing system for construction projects will be rolled out across the nation. Under unified requirements, an inter-agency reviewing process with a single department acting as the lead agency and clear reviewing time-frames will be adopted. And practices such as pledging notification, district-wide evaluation, and joint drawing review and project inspection upon completion will be implemented. In a word, there will be “a single blueprint” overseeing the implementation of a project, “a single window” providing multi-agency services, “a single checklist” for preparing application materials, and “a single set of mechanisms” for regulating the permitting process. The goal is to halve the time required for reviewing construction projects to 120 working days in the whole country within the first half of this year.

“Market players must assume their due responsibilities and recognize that they must take primary responsibility for the projects they undertake, and that they will be held accountable for them on a lifetime basis,” the Premier said. “As for the government, it must not interfere in things that do not fall within its purview, and focus on exercising oversight in all the areas necessary. This kind of oversight will help ensure fairness and efficiency.”