Increasing govt efficiency will act as a stimulus for local economies

The Beijing government is implementing some concrete measures to simplify its business registration procedures and further improve its business environment, according to officials of the capital's finance bureau speaking at a media briefing on Sunday. Beijing News comments:

The pro-business reform plan unveiled by the Beijing government heeds the call of Premier Li Keqiang, who has urged governments at all levels to optimize their business environments.

The reform plan of the Beijing authorities aims to reduce the time it takes to set up a new enterprise, register trademarks and review construction project applications.

The measures, which have been announced even before the two sessions come to a close, mean the capital is the first provincial-level administration to customize its policies and practices according to the requirements of the central government.

Beijing has thus set a good example for local governments by taking the initiative to implementing measures to transform the central government's directive into action.

However, Premier Li's call for action indicates that the past rain has been less than the storm that was forecast, and once again underscores the urgency and importance of bettering the country's business environment.

But even if local governments enhance their efficiency, it will not overcome the obstacles in other aspects, such as the lack of talents, infrastructure and resources, that hinder the thriving of private enterprises. In regions such as Northeast and Northwest China, the local governments' sluggish attitude toward self-reform, if not outright resistance, is due to the lack of immediate benefits for themselves, despite the protracted and complicated business registration process being the first institutional factor killing a promising business plan.

In more developed provinces, such as Guangdong, Jiangsu and Zhejiang, on the other hand, administrative reforms are more self-driven, because boosting government efficiency can be more easily transformed into tax revenues and investment through the better performance of enterprises.

That's why the premier compared reforms aimed at improving the business environment to a government investment stimulus.