State Council removes, simplifies 82 approvals

The State Council, China's cabinet, Tuesday scrapped another batch of government administrative approvals in a bid to transfer government functions and encourage the market to play a more decisive role in the real economy.

According to the announcement posted on its website, 82 administrative approvals have been cut or made easier to obtain, including eliminating the need to get permission from the National Development and Reform Commission to establish a coal trading business, and removing the need to obtain approval from the Ministry of Commerce to set up a chamber of commerce for foreigners in China.

In the past, only the Ministry of Transport had the right to approve foreign investment in transport, but now the approval process will go to the provincial level instead.

It is the third time the cabinet has reduced red tape since the new leadership took office this year. A total of 221 administrative approval items have got cleared in 2013 so far.

Premier Li Keqiang said in March the government will cut 1,700 administrative approval by at least one third within five years.

"The move shows the government's determination to push the reform of administration approvals, and it is another firm step to simplifying administrative procedures and freeing the market," Song Shiming, a professor from the Chinese Academy of Governance, said in an article posted on the government website www.gov.cn Tuesday.

Since 2001 China has sought to cut red tape and let the market play a bigger role in the economy. In the past decade, the country has cut the number of business activities that require government approvals down by almost 70 percent, Reuters reported last year.

In November this year, Premier Li said in a video conference that local governments, in principle, should not directly invest in enterprises as this will easily result in business monopolies and market barriers.

The remark is in line with the decision made at a key Party leadership meeting concluded last month, which pledged to let markets play a "decisive" role in resource allocation to further deepen reform for a more sustainable growth model.

"The new leadership has put in a strong effort to get market-oriented," Yang Weidong, a professor also from the Chinese Academy of Governance, told the Global Times Tuesday.

However he warned that how to supervise the market when the entry barrier becomes very low and an influx of companies would be a big challenge.