Reform of administration

Decentralization of approval power will enable government to concentrate resources on provision of social services

The State Council abolished or transferred to local government another 62 administrative approval items in early May, which was another step forward for administrative reform.

It made the decision at its executive meeting on May 6, after its decision on April 24 to abolish or devolve to local governments 71 administrative approval items.

In October, the central government removed 171 items of administrative examination and approval and transferred another 117 items to local governments.

The high frequency of such moves in recent months shows that the country's institutional reform, centered on the liberalization of approval power, is consistent and accelerating, which is important to spur economic growth, especially at a time of slack recovery.

China's GDP expanded by 7.7 percent year-on-year in the first quarter, down from 7.9 percent in the previous quarter, raising concerns that economic recovery could stall if the government fails to issue new measures to boost growth.

So far, however, the government has yet to launch any stimulus packages, instead, it has sent a clear signal that economic reform will be continued.

At its May 6 executive meeting, the State Council mapped out plans for pushing capital account convertibility and further development of the financial markets, encouraged investment abroad by individuals, and promoted fiscal reform by establishing a transparent and comprehensive budget system, among other things.

The orientation of reform is very clear and the meeting gave an unequivocal answer that reform is how the government will boost the economy.

Yet it is understandable that the market is anticipating a new stimulus, as the economy risks tumbling again after it registered 7.8 percent year-on-year growth in 2012, the lowest since 1999.