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The building of the second section of the Subway Line 2 in Hangzhou， Zhejiang Province， is scheduled to begin at the end of this year. It only took six months for the Hangzhou Subway Group to obtain the construction permits necessary for the project.
Had the government not simplified the examination and approval procedure for urban rail transit projects back in May， it could have taken a whole year to get the permits， said Wu Wenhu， vice general manager of the company.
Reducing and adjusting items requiring administrative examination and approval is a major part of the ongoing institutional restructuring and transformation of the responsibilities of government departments in China.
Since the current administration took office in March， 334 administrative examinations and approval procedures have either been canceled or delegated to lower-level government organizations.
“This has all been done much faster than we originally anticipated，” said Wang Manchuan， Deputy Secretary General of the China Society of Administrative Reform.
Simplifying procedures
During the annual session of the National People’s Congress， China’s top legislature， in March， the State Council released its plan to restructure the cabinet and transform government functions.
Premier Li Keqiang defined the move as “redefining and rationalizing the relations between the government， the market and society.” He made the remarks while meeting the press on March 17， shortly after taking his current office.
At least one third of the 1，700 items still requiring examination and approval from the State Council will be cut within the next five years， according to Li.
“The government should manage those matters that fall within its purview， and leave to the market and society what they can do well，” Li said.
To invigorate market forces and spur economic growth， central government departments have waived approval requirements for a significant number of investment， production and operation procedures.
For instance， the National Development and Reform Commission has relinquished its power to examine and approve a number of items， including the expansion of civilian airports， the manufacturing of urban rail transit vehicles， the production of paper pulp and satellite TV receivers， and the exploration of oil and gas fields of certain scale.
The Central Government has also delegated some of its examination and approval powers to local governments. Previously， approval from the State Administration for Industry and Commerce was necessary if foreign companies wanted to set up representative offices or engage in production and operation activities in China. Now this power has been handed down to provinciallevel commerce watchdogs.
Removal of some administrative approval items is expected to facilitate international cooperation and exchanges. For example， after the reform， Chinese companies no longer have to gain approval from the Ministry of Commerce to sign oil and gas cooperative agreements with foreign partners.
Sino-foreign joint education institutions similarly do not need to go through approval procedures with the Ministry of Education any more when they want to hire foreign principals.
Foreign nationals also no longer have to gain approval from the Ministry of Public Security for travel across China in privately owned vehicles.
Slashing items requiting administrative approval and relaxing registration requirements is also a central part of the government’s efforts to encourage the growth of small and medium-sized businesses， which create more than 80 percent of jobs in China’s urban areas.
To reduce the cost of opening a business in hopes of encouraging entrepreneurship， the State Council made a decision on October 25 to eliminate the minimum registered capital requirement for startups.
Invigorating the market
On May 13， during his speech at a high-level conference on transforming government department functions， Premier Li said that streamlining the government is to let the market play a bigger role in allocating resources and driving economic growth， and shift the government’s focus on creating a good environment for development， providing quality public services and upholding social justice.
The market is the creator of social wealth， and the source of endogenous economic growth， Li added.
The main force for economic development lies in the market， and reform is expected to give people incentive to create wealth and boost the vitality of the economy， said Gao Xiaoping， an administrative management expert in Beijing.
In some cases， the government is not as effective as the market in regulating industry activities， experts say.
Previously， administrative approval was required for steel and cement projects in China， yet over the years， these industries have suffered from surplus capacity and overproduction. In contrast， household electric appliance manufacturing and garment-making have been regulated by market forces， and there is no serious overcapacity in these industries. In the past two decades， the share of private capital in China’s total fixed assets investment has increased from 30 percent to 60 percent； yet it still has obstacles to overcome in some industries.
Li cited the example of a company that had to go through more than 50 procedures across 27 government departments to gain approval to launch a new project. The process usually takes six to 10 months， and could dampen en- thusiasm for investing， Li said.
In recent years， complaints about the lengthy procedures for obtaining professional qualifications have been growing. Many job hunters say that they have been excluded from the job market by requirements that seem irrelevant to their work. State Council departments have the right to certify 110 types of personal qualifications and grant 229 different qualification certificates.
Observers say that clearing unnecessary qualification requirements will lower the employment threshold and create a fairer employment environment.
Removing and decentralization of administrative approval is good for both domestic and international investors and is likely to “unleash new energy at corporate level，” said Niu Li， a senior economist with the State Information Center.
Tightening regulations
Even after cutting and delegating administrative approval items， the government faces challenges in regulatory efforts.
In the past， government employees in offices reviewed application materials， while they now often visit companies to inspect operations， said Wang， with the China Society of Administrative Reform.
According to separate surveys， counterfeit products， infringement upon intellectual property rights and food safety are the most pressing issues facing the market.
“These problems arise from loose market regulation. Rigid regulatory measures must be taken to rectify such problems，” said Zhou Wenzhang， Vice President of the Beijing-based Chinese Academy of Governance.
Streamlining the government will not mean adopting a laissez-faire approach， as market can also fail. The government must do what it can to correct market failures， according to Zhang Monan， a researcher with the State Information Center.
Delegating power and strengthening regulation are like two wheels， only when both wheels are round can a car run， Premier Li said. “Regulation of something already in progress is often much more difficult than approving it for starting in the first place，” he added. The government has stepped up regulation on a number of issues closely related to people’s livelihood， such as food safety and environmental protection.
For example， the State Council requires baby formula milk powder to be regulated and treated as medicine rather than food. On June 20， nine ministerial-level departments， including the China Food and Drug Administration， jointly released a circular on tightening control over the quality and safety of infant formula milk powder.
The circular stipulates that every batch of infant formula must undergo quality tests and producers must maintain their own dairy farms and not source dairy from elsewhere. It also prohibits companies from outsourcing any aspects of production， or repackaging and redistributing formula already made.
In tackling rampant air pollution， the State Council released the Airborne Pollution Prevention and Control Action Plan （2013-17） on September 12.
According to the document， by 2017， the density of airborne particles， especially PM2.5—those less than 2.5 microns in diameter—are to be reduced by 25 percent compared to Beijing and its surrounding areas’ levels in 2012.
“In five years， air quality in China will see significant improvements， with heavily polluted days drastically reduced，” the document said.
Had the government not simplified the examination and approval procedure for urban rail transit projects back in May， it could have taken a whole year to get the permits， said Wu Wenhu， vice general manager of the company.
Reducing and adjusting items requiring administrative examination and approval is a major part of the ongoing institutional restructuring and transformation of the responsibilities of government departments in China.
Since the current administration took office in March， 334 administrative examinations and approval procedures have either been canceled or delegated to lower-level government organizations.
“This has all been done much faster than we originally anticipated，” said Wang Manchuan， Deputy Secretary General of the China Society of Administrative Reform.
Simplifying procedures
During the annual session of the National People’s Congress， China’s top legislature， in March， the State Council released its plan to restructure the cabinet and transform government functions.
Premier Li Keqiang defined the move as “redefining and rationalizing the relations between the government， the market and society.” He made the remarks while meeting the press on March 17， shortly after taking his current office.
At least one third of the 1，700 items still requiring examination and approval from the State Council will be cut within the next five years， according to Li.
“The government should manage those matters that fall within its purview， and leave to the market and society what they can do well，” Li said.
To invigorate market forces and spur economic growth， central government departments have waived approval requirements for a significant number of investment， production and operation procedures.
For instance， the National Development and Reform Commission has relinquished its power to examine and approve a number of items， including the expansion of civilian airports， the manufacturing of urban rail transit vehicles， the production of paper pulp and satellite TV receivers， and the exploration of oil and gas fields of certain scale.
The Central Government has also delegated some of its examination and approval powers to local governments. Previously， approval from the State Administration for Industry and Commerce was necessary if foreign companies wanted to set up representative offices or engage in production and operation activities in China. Now this power has been handed down to provinciallevel commerce watchdogs.
Removal of some administrative approval items is expected to facilitate international cooperation and exchanges. For example， after the reform， Chinese companies no longer have to gain approval from the Ministry of Commerce to sign oil and gas cooperative agreements with foreign partners.
Sino-foreign joint education institutions similarly do not need to go through approval procedures with the Ministry of Education any more when they want to hire foreign principals.
Foreign nationals also no longer have to gain approval from the Ministry of Public Security for travel across China in privately owned vehicles.
Slashing items requiting administrative approval and relaxing registration requirements is also a central part of the government’s efforts to encourage the growth of small and medium-sized businesses， which create more than 80 percent of jobs in China’s urban areas.
To reduce the cost of opening a business in hopes of encouraging entrepreneurship， the State Council made a decision on October 25 to eliminate the minimum registered capital requirement for startups.
Invigorating the market
On May 13， during his speech at a high-level conference on transforming government department functions， Premier Li said that streamlining the government is to let the market play a bigger role in allocating resources and driving economic growth， and shift the government’s focus on creating a good environment for development， providing quality public services and upholding social justice.
The market is the creator of social wealth， and the source of endogenous economic growth， Li added.
The main force for economic development lies in the market， and reform is expected to give people incentive to create wealth and boost the vitality of the economy， said Gao Xiaoping， an administrative management expert in Beijing.
In some cases， the government is not as effective as the market in regulating industry activities， experts say.
Previously， administrative approval was required for steel and cement projects in China， yet over the years， these industries have suffered from surplus capacity and overproduction. In contrast， household electric appliance manufacturing and garment-making have been regulated by market forces， and there is no serious overcapacity in these industries. In the past two decades， the share of private capital in China’s total fixed assets investment has increased from 30 percent to 60 percent； yet it still has obstacles to overcome in some industries.
Li cited the example of a company that had to go through more than 50 procedures across 27 government departments to gain approval to launch a new project. The process usually takes six to 10 months， and could dampen en- thusiasm for investing， Li said.
In recent years， complaints about the lengthy procedures for obtaining professional qualifications have been growing. Many job hunters say that they have been excluded from the job market by requirements that seem irrelevant to their work. State Council departments have the right to certify 110 types of personal qualifications and grant 229 different qualification certificates.
Observers say that clearing unnecessary qualification requirements will lower the employment threshold and create a fairer employment environment.
Removing and decentralization of administrative approval is good for both domestic and international investors and is likely to “unleash new energy at corporate level，” said Niu Li， a senior economist with the State Information Center.
Tightening regulations
Even after cutting and delegating administrative approval items， the government faces challenges in regulatory efforts.
In the past， government employees in offices reviewed application materials， while they now often visit companies to inspect operations， said Wang， with the China Society of Administrative Reform.
According to separate surveys， counterfeit products， infringement upon intellectual property rights and food safety are the most pressing issues facing the market.
“These problems arise from loose market regulation. Rigid regulatory measures must be taken to rectify such problems，” said Zhou Wenzhang， Vice President of the Beijing-based Chinese Academy of Governance.
Streamlining the government will not mean adopting a laissez-faire approach， as market can also fail. The government must do what it can to correct market failures， according to Zhang Monan， a researcher with the State Information Center.
Delegating power and strengthening regulation are like two wheels， only when both wheels are round can a car run， Premier Li said. “Regulation of something already in progress is often much more difficult than approving it for starting in the first place，” he added. The government has stepped up regulation on a number of issues closely related to people’s livelihood， such as food safety and environmental protection.
For example， the State Council requires baby formula milk powder to be regulated and treated as medicine rather than food. On June 20， nine ministerial-level departments， including the China Food and Drug Administration， jointly released a circular on tightening control over the quality and safety of infant formula milk powder.
The circular stipulates that every batch of infant formula must undergo quality tests and producers must maintain their own dairy farms and not source dairy from elsewhere. It also prohibits companies from outsourcing any aspects of production， or repackaging and redistributing formula already made.
In tackling rampant air pollution， the State Council released the Airborne Pollution Prevention and Control Action Plan （2013-17） on September 12.
According to the document， by 2017， the density of airborne particles， especially PM2.5—those less than 2.5 microns in diameter—are to be reduced by 25 percent compared to Beijing and its surrounding areas’ levels in 2012.
“In five years， air quality in China will see significant improvements， with heavily polluted days drastically reduced，” the document said.