China eases investment approval process

NDRC cuts list of required documents

China has simplified investment approval procedures by removing 18 items from the list of required documents for enterprises, the country's top economic planner announced Wednesday, a move that analysts said will help to stimulate investment growth in the private sector.

The 18 items that will no longer be required for getting approval for investment projects include bank loan certificates, letters of intent for financing and credit certificates, the National Development and Reform Commission (NDRC) said in a statement published on its website Wednesday.

The decision was communicated to subordinate authorities on December 31 and came into effect the same day, the statement said.

The announcement from the NDRC came after a statement was released by the State Council on its website on December 29, which ordered related authorities and local governments to simplify investment approval procedures for companies.

The NDRC measure is also part of a series of reforms designed to boost investment.

Previously, on November 18, the State Council released a new regulation saying that a series of projects would no longer need to get approval from the central government.

News portal cnr.cn reported on the same day that the projects mentioned in the regulation accounted for three-quarters of projects that previously required approval from the central government.

Li Zhangze, spokesman for the group spearheading the reforms under the State Council, said at a news conference held in Beijing on September 10 that the central government had scrapped or decentralized 632 administrative approvals since March 2013.

"The new reform by the NDRC will help to stimulate investment growth in the private sector," Zhang Bin, a research fellow at the Chinese Academy of Social Sciences, told the Global Times on Wednesday.

According to data from the National Bureau of Statistics (NBS) released on December 12, China's fixed-assets investment, seen as a major indicator of economic activity, increased by 15.8 percent in the first 11 months of 2014 year-on-year, the slowest growth in the past 13 years.

Simplified investment approval procedures could help to support the growth of investment in fixed assets, as well as introducing more private capital into services, medical care and energy, areas that used to have greater barriers to access, Zhang said.

Some projects financed by private capital have to submit hundreds of documents and take months to get approval, which has a heavy impact on investment efficiency, Zhou Dewen, president of the Small and Medium-sized Enterprises Development Association in Wenzhou, East China's Zhejiang Province, told the Global Times on Wednesday.

"It will be a complicated task to simplify investment approval procedures as it involves various parties and sectors, and will require close coordination between various departments," Zhou said.

A statement released after an executive meeting of the State Council presided over by Premier Li Keqiang on Wednesday said that resolving difficulties in approval is a key part of the current drive to reform government functions, and there will be a time limit on approvals in the future to improve the efficiency of government work.

The statement also said that an online approval process would be launched in the future, in a bid to offer greater convenience for investors. Furthermore, all the information regarding the approval process, apart from State secrets, will be published in order to improve transparency.

"The current situation is that governments at all levels intervene too much by focusing on approval in some investment areas, while in other areas they are inactive," Zhang said.

As well as simplified investment approval procedures, more reforms are needed, such as establishing a fair market environment and breaking the dominance of certain sectors by large firms, Zhang noted.