Reducing market intervention

In a move to further lower the access threshold and simplify their approval procedures, the State Council, China's Cabinet, has stated that there will be unified registration codes and certificates for all legal persons and organizations.

The unified coding will change the past practice whereby a legal person or entity usually receives different codes from different State departments at the time of registration, including from the industrial and commercial, taxation and quality supervision departments. Multiple codes for businesses have resulted in different information being held on the company by different departments, thus making its credit record difficult to track.

Multiple departments holding different information on the same enterprise has also increased administrative costs and left room for corruption.

The past complicated and chaotic coding system for legal persons and enterprises also made it difficult for different departments to exercise monitoring, and made it difficult for the public to gain information on specific enterprises. It has proved a big obstacle to the building of a unified social credit system.

The latest push for unified coding and certificates is aimed at breaking the long-controversial administrative barriers and forming a unified market. It will catalyze domestic administrative reforms at a faster pace. Since reform of the commercial system was launched in March last year, the central government has continuously taken steps toward simplifying administrative procedures and delegating power to lower levels of government, effectively releasing market vitality.

The adoption of a unified coding system is not only a requirement for the building of a unified domestic market, but also a necessary step for China to be integrated into the world economic system. It also marks the country's further step to remove excessive administrative interventions into the market, a practice that has tended to suffocate market vigor.

The above is a Guangming Daily article published on Monday.