Simplifying government procedures will boost economy

Editor's Note: At a meeting on Jan 13, the State Council, China's Cabinet, vowed to further simplify administrative procedures and delegate central government powers to lower levels of government and market players. It also pledged to optimize services and lighten the burden on enterprises to create a better platform for business startups and innovation. The following are comments from the media:

To simplify administrative procedures and delegate central government power to lower levels of government or market players marks the first step toward the demarcation of the government and the market. It is also an important move to push forward supply-side reform and expand effective demand. Simplifying procedures and decentralization will help promote business startups and innovation. Statistics indicate that in the first three quarters of 2015, there were 10.66 million newly registered market entities, up 15.8 percent year-on-year, with a registered capital of 20.7 trillion yuan ($3.15 trillion), an increase of 40.9 percent year-on-year.

Despite a considerable cut in the number of items that need administrative examination and approval, irregular and low-efficiency administrative approval procedures still exist in quite a lot of areas. These considerably increase the costs for businesses. This is also against the spirit of the Central Economic Work Conference, a tone-setting conference convened in mid-December, which urged the administrative burden on enterprises be reduced, procedures simplified, and unreasonable intermediary services abolished.

At the meeting, the State Council decided to push forward a series of measures aimed at removing the obstacles that constrain business startups, innovation and the development of services. These measures will reduce the costs for enterprises and better release their potential for development and innovation.

Xinhua News Agency

Simplifying administrative procedures will also serve as a major step toward promoting supply-side reform. To simplify administrative procedures does not mean delegating central government power to lower levels alone, it also means better and more efficient management by the central government. The State Council has decided to make a series of revisions to some 66 existing laws and regulations to exercise better monitoring and management of adminis-trative procedures, and provide legal guarantees for the ongoing reforms.

The simplifying of administrative procedures is a consistent effort by the incumbent Chinese leadership. While it is also important for the government to transform its functions, its main purpose is to optimize the country's economic environment and nurture a new economic pattern. A modern economy powered mainly by innovation needs reduced administrative constraints and interventions. Economic development over the past decades has deepened people's perception that eliminating ineffective regulations can spur economic vigor, boost market efficiency and promote economic transformation.

Lower tax burdens on enterprises and lower prices as a result of the simplification of administrative procedures will promote demand and thus offer an internal impetus to the ongoing campaign for the supply-side reform. At the same time, only by shifting more power to market players can they object to and check unreasonable administrative procedures. A core rule of the market economy is explicitly defining the limits of government power. Any crossing of the legal boundaries by a government and it should be held accountable for its breach of laws and regulations. In this aspect, many of the country's administrative organs, those below the county level in particular, still have a lot of improvements to do.

China Business News

To continuously stimulate market vigor has been one of the top priorities of the current government. A series of institutional and systematic reforms aimed at transforming government functions, including measures to simplify administrative procedures and optimize services, is essential to reduce restraints on market actors and create a better environment for their development. Reducing the number of items that need administrative approval, strengthening supervision and establishing a fairer and more just market order will create a source of vigor for economic development. Without market vitality, supply-side reform would simply be hollow talk.

As matter of fact, the simplification of administrative procedures also needs legal guarantees. To strengthen the legal guarantees for reform, the fruits resulting from simplifying or abolishing some procedures and lowering costs should be confirmed in legal form. This is also one of the main tasks set by the State Council meeting, as indicated by the revisions made to 66 existing administrative regulations.

Better management needs the support of better laws and regulations, ones that can offer generalized policy support to enterprises.

yicai.com