SCIO briefing on administrative approval system reform
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E-mail China.org.cn, September 10, 2014
China National Radio:
Since much attention has been given to the cancellation of items and delegating power in terms of corporate investment projects, I would like to ask what are the concrete measures to implement the change of policy? What achievements have been made? And, what will be the next step?
Yang Jie:
This is concerned with reform of the investment management system. In the current system, corporate investment is subjected to State approval or registration. To be specific, for projects in the “Index of Government-Approved Investment Projects,” an approval process is needed; for projects not in the Index, registration is sufficient.
Deepening reform of the investment system to establish an enterprise's dominant role in investment is required by the central authorities and expected by society. Since last year, the NDRC has regarded reducing and delegating the power of approval as a central goal in the transformation of government functions and streamlining administration. To further establish enterprise autonomy in making investment, the NDRC has been taking measures from three perspectives.
First, we are revising the index of projects needing approval so as to narrow the range. “The Index of Government-Approved Investment Projects” is an important document in that it sets the range of projects requiring government approval. Its timely revision is essential in dealing with the relationship between the government and the market, and establishing the corporate sector's autonomy in making investments.
Last year, the NDRC and other concerned agencies jointly carried out some revisions to the Index, before the State Council enacted the 2013 version. Compared with the older version enacted in 2004, the 2013 Index features the cancellation, delegation or handing over of 49 items formerly requiring approval. Projects requiring approval by central authorities fell by 60 percent.
Currently, investment projects still subject to an approval process account for less than 20 percent compared with the number before the transformation of government functions began.
This year, we will make further revision as required by the State Council to further narrow the scope of projects needing approval to further delegate approval powers. Once this has been carried out, the number of projects requiring central approval will have been cut by a further 40 percent. The projects that no longer require government approval will carry more significance.
Second, we should accelerate the implementation of policies that will solidify the corporate sector's autonomy in making investments. We will advance this undertaking from two perspectives.
On one hand, we will launch a full-front revision to the corresponding management measures. The NDRC has enacted the “Management Measures on Government-approved Investment Projects,” which clarified certain internal conditions of a project that should be left to the enterprise. Such conditions include a project's market outlook, economic profitability, needed technical solutions and funding sources.
In contrast, administrative approval agencies are responsible for vetting a project's external conditions, such as preserving economic security, properly exploiting natural resources, optimizing major structural layout, protecting the ecological environment, protecting the public interest and guarding against monopoly.
The revision also applies to the approval and registration process of foreign-invested and overseas-invested projects to simplify the content declaration as well as the approval process.
On the other hand, we should ensure efficient services and effective management. We have compiled a service guide, a template for reporting a project application. We also provide examples for different sectors -- all measures to better accommodate the needs of enterprises. At the same time, for better self-discipline, we have also circulated the code of conduct, a standard template for approval documents; we have a clear workflow that includes all steps and rules leading to a result.
Third, we will establish and perfect the joint co-management mechanism, where we will explore how to implement regulations in a better way, in order to prevent excessive investment, disorderly competition and resource wastage through poor supervision and a corresponding management vacuum.
After the launch of the 2013 Index, the NDRC joined hand with the Ministry of Land and Resources, Ministry of Environmental Protection, Ministry of Housing and Urban-Rural Development and the China Banking Regulatory Commission to issue a notice that requires all local governments as well as related departments to cooperate and coordinate in this round of deepening reform. The notice required all agencies to delegate administrative approvals to lower levels besides stepping up regulation, trying to achieve "double synchronization" -- the synchronization of delegating powers and responsibilities, and the synchronization of reinforced regulations and supervisions.
Generally speaking, most of the approval items either cancelled or delegated to a lower level last year represented the most crucial areas for corporate or local investments. The projects involve large funding, have a large employment capacity, and have high value.
I have some data to share with you. In May of last year, the NDRC delegated approval power for "urban rapid rail transit projects" to local governments. As of now, a total of 14 cities, including Chongqing, Xiamen, Kunming and Harbin, have launched 25 urban rail transit projects with total mileage surpassing 500 km and total investment reaching 330 billion Yuan (US$53.66 billion). Likewise, following the stipulations in the revised regulation, 92 percent of corporate overseas investment projects will be subjected to a registration process, instead of approval as before; this will greatly simplify enterprise overseas investment.
Reform has no end and innovation is the way forward. As the next step, the NDRC will step up its reform efforts. However, in so doing, it will pay more attention to balancing delegating powers and stepping up regulations besides advancing reform and innovation effort for a better investment management system.
I'd like to brief you two aspects of our work. On one hand, we are focusing on "power delegation," in which we will request the State Council to enact the 2014 Index, and we will also reduce, integrate and standardize administrative approvals to facilitate investment and employment.
On the other hand, we are focusing on "regulation" with an objective to innovate the means of approval and regulation based on information technology. In general, we will optimize procedures, work online and set deadlines -- improvements that will turn granting approval into a service. We will build a nationwide online administration platform for fix-asset investment projects in order to achieve electronic-governance and ensure transparency in approval procedures. We will also rely on this nationwide online platform to build a coordinated regulation system that will involve governments of all levels and different departments in the same levels.
Thank You.
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