Relinquishing power

By+Yin+pumin

In a bid to boost transparency， Chinas central government departments have been ordered to make public their “power lists”—registers of administrative approval procedures.

According to a circular issued by the State Council， the countrys cabinet， on February 20， all its subsidiary ministries， commissions and administrations are to publish their existing approval requirements on their official websites， so that they can be viewed by the general public.

The government should reform what and how it administrates， and central government departments will not be allowed to interfere in the approval of items not included in their own registers， the circular announced.

As of February 28， 54 of the State Councils 75 subsidiary departments had put their lists on their official websites respective homepages. They also published telephone numbers for soliciting public opinions.

The departments now have a collective total of 1，143 administrative approval requirements. Among them， the State Administration of Taxation reports the highest number of items at 87， while some departments have retained only one， such as the State-owned Assets Supervision and the Administration Commission of the State Council.

The move to publicize the lists has won applause from the media as well as the public. Zhou Zhiren， a professor of public administration at Peking University， told Beijing Business Today that the greater transparency brought by the lists allows the public to supervise the government more effectively.

It will help “put power into a cage of regulations，” said Dong Keyong， Dean of the School of Public Administration and Policy at the Beijingbased Renmin University of China， quoting words uttered by President Xi Jinping during a vow to fight corruption.

In the February 20 circular， government departments are required to solicit public opinions on further reductions of approval procedures.

Turning to the market

During his media debut as Chinas premier on March 17 last year， Li Keqiang vowed that the Central Government will cut its 1，700 administrative approval procedures by at least a third during its five-year term， which will end in 2018.

Li admitted that the administrative approval system in its current state had adversely affected efficiency and could possibly allow for corruption. “What society and the market can do well must be left to them. The government needs to manage the matters that fall under its supervision，” he said.endprint

According to a report delivered by Li to the Second Session of the National Peoples Congress， Chinas top legislature， on March 5， 416 administrative approval procedures were axed or otherwise delegated to lower-level governments by the State Council in the past year. He pledged to cancel or re-delegate an additional 200 plus requirements in 2014.

Also， the State Council announced in August last year that strict standards must be used in setting new approval requirements for products， investment by enterprises and qualification processes. At the same time， it restricted authorities from setting approval requirements in industries where the market can properly govern itself.

“The moves show that the government has relaxed control on sectors open to market competition，” said Jin Linbo， Vice President of the National Academy of Economic Strategy at the Chinese Academy of Social Sciences.

On February 11， Premier Li again pledged to give more authority to the market on investment issues this year. He called on government departments to adopt a “negative list” approach in delegating powers and reducing administrative approval procedures. “The list should be formed according to the law to prevent any new requirements being added by local governments without proper legal procedures，” he said at the State Councils second meeting on clean government.

The premier especially stressed the importance of facilitating investment， urging for “great determination” in reducing administrative approval procedures that may impede investors.

“Sometimes governments intervene in issues that fall outside of their authority， and this has increased transaction costs and weakened the role of the market in allocat-ing resources，” Li noted.

The remarks are in line with a decision on comprehensively deepening reform made at the Third Plenary Session of the 18th Central Committee of the Communist Party of China（CPC）， which convened in November last year.

According to the decision， the market will be given a “decisive role” in allocating resources.

Wu Hui， an associate professor of governance at the Party School of the CPC Central Committee， said that some government departments used to focus on the administrative approval process while ignoring their role as regulators during the course of operations and afterward.

Through simplifying the approval process， the government should be able to enhance its regulatory role， which is necessary as the market cannot be effective all the time.endprint

Gradual progress

“With fewer items subject to administrative approval， the new government has shown its determination to facilitate market-oriented reform，” said Nie Gaomin， Director of the Economic Structure and Management Institute with the National Development and Reform Commission， the countrys top economic planner.

Chinas current administrative approval system is a product of the planned economy. It has long been blamed by the public for inefficiency and possible corruption. To create a smaller， cleaner， more efficient and services-oriented government， the country began reforming the system.

In 2001， the State Council set up a leading group tasked with pressing ahead with the reform. Since 2002， experts in fields such as economics， law and public administration have been invited to evaluate the necessity of administrative approval procedures item by item. The experts finally reached a consensus that nearly 70 percent of those procedures could be suspended.

During the following decade， the Chinese Government abolished or adjusted administrative approval requirements for 2，497 items， or 69.3 percent of the total， according to figures released by the State Councils Administrative Examination and Approval System Reform Office.

Meanwhile， local governments have abolished or adjusted requirements for 37，000 items， accounting for 68.2 percent of the total.

Through the reform， the government has reduced direct interference in economic activities and let the market play a bigger role in allocating economic resources， according to officials in charge of the reform. Meanwhile， the government has strengthened macroeconomic control and market regulation， and attached more importance to social management and public services.

Analysts believe that cutting red tape will be a breakthrough in achieving the transformation of government functions into creating a sound market environment and providing basic public services to boost Chinas economy.

Wang Yukai， a professor of public administration at the Chinese Academy of Governance， said that canceling administrative approval requirements is expected to encourage entrepreneurship and prevent the government from interfering in the market.

“This is reform that is within the government itself. It is difficult， but we have to do it to ensure a vigorous market environment，” said Chi Fulin， Director of the China （Hainan） Institute for Reform and Development. “Reducing administrative approval procedures may be a minor step， but it could lead to major reforms in the country.”

Yu Hui， Director of the Public Policy Research Department of the China Society of Economic Reform， pointed out that though a majority of administrative approval procedures have been scratched off， the underlying structure of the system remains intact. He said that some controversial administrative approval requirements do not have a clear legal basis.

Zhang Jianhua， Chairman of Hubei Chamber of Commerce in Wenzhou， a city in east Chinas Zhejiang Province known for its small and medium-sized businesses， suggested the government remove more administrative approvals rather than delegating the power to lower-level governments.

“It doesnt necessarily mean that enterprises will benefit from power delegation， since they still need to go through the whole approval procedure，” Zhang said.endprint