With the introduction of the regulation on bettering the business environment, China will take further steps to foster a world-class, market-oriented business environment governed by a sound legal framework. Greater efforts will be made to tackle the difficulties that market players of all types face in their business operations, the State Council decided at the executive meeting on Nov 27 chaired by Premier Li Keqiang.
The Chinese government sees fostering a more enabling business environment as a high priority. General Secretary Xi Jinping has said that the business environment is like the seedbed for companies to emerge and thrive, and reform in key areas must be accelerated. Premier Li Keqiang has underlined the need to take more results-oriented measures targeting the weak areas and problems to continuously improve the business environment.
The regulation on bettering the business environment, which is scheduled to be implemented on Jan 1 next year, draws upon China’s successful practices and experience in recent years in transforming government functions and improving the business environment. The regulation includes the requirement for building a world-class, market-oriented business environment governed by a sound legal framework. The meeting on Nov 27 required local governments and departments to swiftly issue supporting measures and bring all existing ordinances and normative documents in line with the regulation by revising or repealing any inconsistencies.
“Energizing the market is a key step in countering the downward economic pressure. We will continue with the tax cuts and reform of government functions for a better business environment in China,” Premier Li said.
In the World Bank’s October report, Doing Business 2020, China ranked 31st among 190 economies, up 15 spots from 2018.
“With hard work in recent years, we have made notable progress in improving the business climate, which has been recognized by the international community,” Premier Li said. “Yet we must also recognize the underperforming aspects, and the big potential for improvement, such as the big gap between eastern, central and western regions, and between urban and rural areas.”
It was stressed at the meeting that concerns of market players will be taken as a priority, as required by the regulation. Administrative approval requirements will be further streamlined. A list of national-level review items will be formulated next year, and no government approval requirement beyond the list would be allowed. The time required for starting a business will be further shortened. The number of national vocational qualifications will be more than halved by the end of 2020.
Market access will be further eased. Requirements regarding the qualification, registered capital and business venue of market players in the service sector will be significantly relaxed. Unwarranted licensing requirements on for-profit medical and education institutions will be removed.
The meeting urged further overhauling business-related charges by government-affiliated institutions, commercial banks, industrial associations and intermediary agencies. Unjustifiable charges in logistics will be overhauled, and charges on a regular container in import and export will be brought down to under $400 before the end of next year.
Discriminatory practices concerning market access, qualification criteria and industrial subsidies against businesses based on ownership structure will be removed to promote impartial oversight, where all companies are treated equally.
Government services will be upgraded. The time required for real estate general registration and mortgage registration at city and county levels will all be cut to under five working days next year. The practice of pre-commitment compliance will be fully rolled out.
“We must get our priorities right in improving the business environment. We should build on the good work in recent years regarding cutting the time required for starting a business, and decoupling business licenses from operation permits, and scale up our efforts in these two aspects,” Premier Li said. “Government departments should resolutely deregulate, including cutting permit requirements and enhancing compliance oversight.”
To better harness the guiding and catalyzing role of business environment rating, the meeting urged efforts to improve the system of indicators and evaluation methods in light of responses from market players on the basis of the trial rating in a select number of cities since 2018.
Targeted reform measures will be introduced in weak areas such as paying taxes, getting credit, and trading across borders in line with advanced international standards, and practices that have proved effective and well-received by market players will be promoted at a faster pace, in order to continuously improve China’s market environment.
“Before introducing any policy that involves public interests and market players, the government must be thorough in its research and follow due procedures. The viewpoints of all stakeholders should be heeded to shape good expectations,” the Premier said.
