Premier Li urges to streamline governance to spur economy

BEIJING -- Chinese Premier Li Keqiang said Monday that efforts to streamline government administration, transform government functions and boost efficiency will be redoubled to spur economic vitality and attract overseas investment.

The premier set out the goals at a national teleconference at the State Council in Beijing.

"Basically, our economic structural reform is to establish a proper relationship between the government and the market, allowing the market to play an essential role in allocating resources," said Li, adding that the key of such a reform is to transform government functions.

One of the government's key objectives through such efforts is to realize market potential and ensure sustainable economic development.

Since 2013, 618 items of State Council agencies have been canceled, or delegated to lower approval levels, easily meeting, by more than a third, the target for cutting the number of items requiring administrative approval.

Yet Li noted that work remains to be done.

"The government is still involved in areas that it should not be responsible for," he said.

Li stressed that the efforts to streamline administration and scale back government control are being made to meet the requirements for another round of opening up and improve China's global competitiveness.

"We used to rely on our demographic dividend, yet today, in order to boost investment, we need to rely more on human resources and innovation," he said.

Several officials from both the central and local governments have also introduced their achievements in streamlining administration in the past three years during Monday's meeting.

The city of Shanghai has applied for its Free Trade Zone, a much reduced negative list for foreign investment which has cut special administrative measures by more than one third.

Consequently, foreign investment programs that are not on the negative list can be filed immediately.

The Shanghai government has also explored new business registration policies, which has slashed company registration time from 29 days to less than four. It has also made great strides in systematic innovation, in terms of trade supervision.

In the city's free trade zone, more than 100 new measures were implemented and international trade was given its own exclusive channel. The time taken for customs clearance procedures was cut by 40 percent.

Also in recent years, the State Administration for Industry and Commerce unified three types of business licenses, shortening the registration process for enterprises by two to three days, which has resulted in greater convenience for enterprises.

The National Development and Reform Commission carried out its efforts in streamlining administration through two lists, four platforms as well as further delegation of power to lower levels.

The State Commission Office for Public Sector Reform will re-examine previous reforms and tackle any improper delegation of power. Its work will also improve once it comes under a more unified standard as will online administration and consultation.

Making information available on items concerning approval, specifying responsibilities, and deepening reforms will also be enhanced.

Enterprises have already benefited from implemented measures and market vitality has increased.

The measures undertaken are already making a difference. China's business environment has greatly improved in recent years, Li said, and market access has been further opened up.

According to the World Bank, China has risen six places over the year to 84th in terms of the convenience of conducting business out of 189 economies. Up until now, more than 95 percent of foreign invested projects, and more than 98 percent of overseas invested projects, are regulated online.

Yet China's conventional advantages in the global economy started to show weaknesses in recent years, while both foreign trade growth and utilization of overseas investment have been declining.

This has something to do both with weakening international demand and China's business environment per se.

"We need to optimize the business environment for both foreign and private investors to unleash market vitality and improve our overall competence," Li said, adding that China's employment could also be affected.

For the past three years annually, China managed to create more than 13 million new jobs in cities. Efforts to streamline power also include reforms in professional qualifications, technology transfer and other social undertakings.

These measures are crucial for China to move forward its supply-side structural reform.

"Governance transparency is fundamental for modern governance, something that we also want to achieve through transforming government functions," Li said, adding that this is also part of an effort to unleash market vitality and boost the economy.

"We need to make governance transparency a normal thing for the public," he said.

The premier also urged transforming government functions to improve social equality and justice and stronger supervision to tackle illegal activities, also a requirement for transforming government functions.

He also stressed that the government should optimize services and increase efficiency to improve people's livelihood.