The Chinese government has demanded local authorities to halve the time required for starting businesses as part of efforts to improve the business environment and encourage entrepreneurship.

The amount of time required to start a business in municipalities, sub-provincial cities and provincial capitals should be reduced from an average of 20 workdays to within 8.5 workdays by the end of this year, according to a document released by the General Office of the State Council.

The measure will also be introduced in the five leading cities of Dalian, Qingdao, Ningbo, Xiamen and Shenzhen, with other areas also required to see positive progress, the document said.

The target will be realized nationwide in the first half of 2019.

"The procedures that a new firm needs to go through to become initially operational should be streamlined, making it simpler to submit applications, register a business, carve common seals, apply for invoices and manage social insurance," according to the document.

"The efficiency, transparency and predictability of the services should be increased, and the experience of starting a business should be improved, so as to reduce institutional costs and boost mass entrepreneurship and innovation," the document said.

The pace of the reform to cut red tape in China was fast in the past five years. World Bank data has seen China's ranking improve by 18 places for "ease of doing business" in the past five years, and increase by 65 places for "ease of setting up a business."

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