China's call to streamline gov't boon to business
Last Updated: 2014-03-07 22:10 | Xinhua
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It took some time for Hsu Pin-hsiung to acclimatize to local business culture in Chinese mainland's northern industrial city of Anshan.

Hsu, from Taiwan, is frequently frustrated. It often takes months for the real estate company he works for to get the go-ahead from the city's decision makers.

"I carry stacks of papers everywhere with me and have to visit seven or eight times just to get one thing done," Hsu said.

Things began to improve in 2013, when then newly-elected Premier Li Keqiang started talking about streamlining administrative approval and cutting red tape to help the market function efficiently.

Hsu's latest project is in downtown Anshan and, luckily for him, he does not need to go to the mayor's office anymore. His project only needs the approval of district officials now and a regulatory committee has taken charge of all paperwork and applications.

This is a big improvement on more than a dozen government organs Hsu dealt with in previous projects.

China has been fighting bureaucracy since Xi Jinping became General Secretary of the Communist Party of China in November 2012. A regime to reduce the extravagant excesses of Party officials was introduced with Xi threatening swift and potent justice for both "tigers" and "flies" -- officials both high and low.

In a report to the National People's Congress, China's parliament, on March 5, Li explained that the administrative system was still in need of complete renewal.

"We will streamline administration and delegate power to lower government levels. This is a revolution the government imposes on itself," Li said.

Around 200 plus items which still require State Council approval will be scrapped completely or trickled down to lower levels this year. Approval will be simplified to make it easier to invest or start new businesses.

These 200 items will follow the same path as more than 400 items which were similarly dealt with in 2013. Following the overhaul last year, new business registrations increased by 27.6 percent.

Reviewing the central government's work last year, Li attributed steady growth to both the invisible hand of the market and the visible hand of the government.

Comprehensive reform went into high gear in November when a 60-point reform plan was made public. The centerpiece is economic restructuring, but the Party realizes that the key to sustained economic success is redefinition of the government's role in a market economy and improved efficiency, according to Zhou Wenzhang, a former vice president of the Chinese Academy of Governance.

Streamlined government is good for business. In Liaoning Province, for example, about 300 new companies have been set up every day since applications were simplified at the beginning of this year. The figure represents an increase of 40 percent increase on the same period last year.

While cutting government approval seems like good news for the market, there are rumblings of risks that the "power vacuum" might suck in.

Wang Yukai of the Chinese Academy of Governance believes enthusiasm for starting new businesses might complicate the problems of overcapacity and excessive investment.

Administrative reform is currently limited to the central government. Only a few lower administrations have answered the call to cut red tape. For Wang, administrative reform in cities and counties is critical. It is government at those lower levels which deal with enterprises on a day-to-day basis.

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