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  • mbablitz mbablitz May 17, 2013 5:17 PM Flag

    China to simplify governement approval processes

    China has vowed to simplify governmental procedures in approving business projects, as the State Council Wednesday announced a trimmed list of items for Chinese business establishments, which used to require consent from the central government and take a long time before being carried out.

    Canceling or simplifying the administrative approval procedures could save time and expenditure for the enterprises. Premier Li Keqiang disclosed during a nationwide State Council teleconference Monday that "some projects need to receive approvals from 27 departments."

    A total of 133 items will be either exempted from the government's administrative review, or only require consent from lower-level authorities, said the State Council, China's cabinet. The move was welcomed by China's enterprises and experts, who said it will create a favorable business environment and stabilize economic growth, but also worry if the policy can be implemented well.

    Some 71 items will no longer be subject to administrative review, and another 20 items will be given to lower-level government agencies to consider for approval, said the State Council. The other items will be subject to simpler approval procedures, or canceled completely, it said.

    It is the seventh time the State Council has announced such a trimmed list since it started simplifying administrative reviews in 2001.

    "The new leadership's resolve to ease controls this time is stronger than in the past," Li Jianming, deputy director at the China Enterprise Confederation, told the Global Times Thursday, adding that encouraged by the policy, some entrepreneurs who plan to transfer their assets overseas may possibly look for more investment opportunities in China.

    But Li noted that enterprises' major concern is how the policy will be implemented.

    For example, the administrative approval procedure for airport investment and construction will be canceled in the new list. However, "some obstacles remained, for instance, agencies which are in charge of charging administrative fees may be hesitant to cancel all the expenses they charged before," Li said.

    So far, the central government has removed or simplified administrative reviews of 2,630 items since 2001, data from the State Council showed.

    One highlight of the new list is that some key sectors including electricity, oil and gas are included.

    According to the new list, requirements for approval from the NDRC for exploitation of new oil fields with annual production over 1 million tons will be canceled.

    Businessmen said "it is a good sign" indicating the government is trying to create a more comfortable business environment for enterprises than before, although they still cannot benefit from the policies "in the short term."

    "The limit of 1 million tons annually is too large, and only massive enterprises can afford to invest in such a large project," Chen Peng, a manager with Shtar Science & Technology Group, an oil refinery cooperation based in Shandong Province, told the Global Times.

    Some businessmen welcomed the policy and said they are looking forward to the policies in the long term. Li Baomin, Party secretary of Jiangxi Copper Co, China's largest copper producer, was quoted by Xinhua as saying that "in the past, what we produced and any new project had to be approved by the central government, which greatly restrained our development."

    Wang Xiaoguang, a researcher at the Chinese Academy of Governance, believes that it would be "one of the most thorough reforms" in China in the past three decades, if governments strictly implement recent policies to ease market controls.

    "The new list covers key sectors like energy, which used to be strictly controlled by the central government," Wang told the Global Times Thursday.

    Another highlight is fewer controls on service industries, which could bring a large number of job opportunities and "resolve the issues of unemployment in the long term," Wang noted.

    College graduates are facing arguably the most difficult situation ever in getting a job this year, as nearly 7 million graduates across the country are flooding to economic hubs, according to Yao Yuqun, a professor on labor economics at the Renmin University of China, who expressed his worries to the Global Times during a recent interview.

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    • Obviously, China has a ways to go to fully produce a business environment that minimizes the impediments to business formation, capital deployment, and employment of staff...

      ... but they are definately moving steadily toward a more friendly environment for business development and capital deployment, while the U.S. is moving in an increasingly detrimental direction for business, capital, and private sector employment.

      Like 2 ships passing each other slowly in the night.


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