Binning seals and delegating power to revitalize market

BEIJING－On a wall of the administrative service center in Handan, Hebei province, 2,894 out-of-use official seals are displayed to show visitors how much authorities have done to cut red tape.

They are an epitome of the progress China has made in streamlining administrative approvals and delegating power to lower levels, a key reform aimed at boosting market vitality in a slower economy.

China was ranked 78th out of 190 economies in ease of doing business, according to a 2017 report by the World Bank, up from 96th rank in 2013.

Though there remains room for improvement, the pace of the reform to cut red tape has been fast in the past five years.

Since the 18th National Congress of the Communist Party of China in late 2012, more than 40 percent of administrative approvals at the central government level have been canceled or delegated to lower levels. At the local level, the ratio exceeded 70 percent in many regions.

The State Council has slashed the items of approvals and accreditations for professional qualifications by over 70 percent.

Both domestic and foreign investors have benefited from the reform. The number of projects that require central government approval have been reduced by 90 percent, while over 95 percent of foreign-invested projects now need only registry instead of approval.

Last month, the China Banking Regulatory Commission revised rules for foreign banks, scrapping approval procedures for four business items including overseas wealth management products and portfolio investment funds.

In particular, it now takes much less time and effort to start new businesses as authorities have reduced procedures.

In Northeast China's Jilin province, the time needed to start a business was shortened by three to six months on average after the government eased market entry last year.

Technology has also been applied to make administrative services more efficient. In some cities, business owners can pay taxes faster through mobile apps or face recognition.

The reform has paid off. In 2017, 16,600 new businesses were set up each day on average, up from 6,900 in 2013, proof that entrepreneurship is on the rise.

New market entities contributed to more than 40 percent of new urban employment in 2016, according to Zhang Mao, head of the State Administration for Industry and Commerce.

A string of new growth engines such as the sharing and digital economies have been established. In 2017, online sales of goods increased by 28 percent and courier delivery volume grew by nearly 30 percent.

"The reform has fostered a better business environment and laid a solid foundation for economic growth," said Song Gang, an official with the Jilin provincial government.

Last year, the number of new businesses registered in Jilin rose 8.1 percent, while the province's private enterprises saw their revenue from primary business increase 7 percent, according to Song.

By letting the market play a larger role, the reform to cut red tape is part of the government's plan to speed up the shift to high-quality development and a modernized economy.

"The more progress is made in the reform to cut red tape and delegate power to lower levels, the more vibrant and stronger the economy will be" said Zhang Yansheng, a researcher with the China Center for International Economic Exchange.