SCIO briefing on administrative approval system reform
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E-mail China.org.cn, September 10, 2014
China Radio International:
The reform of the registration system of registered capital is an important link in the reform of streamlining administration and delegating power. Some have described the “wide access and strict supervision” principle as subverting the traditional management mode. I wonder how the reform and the implementation of the system is proceeding currently? What benefits has it brought to Chinese and foreign companies? What major work is still to be carried out?
Zhou Shiping:
Reform of the registration of a company’s registered capital started to be fully implemented on March 1 this year. This included promoting the use of a subscribed capital registration system, a relaxation of registered capital registration conditions, simplified market player residence (place of business) registration requirements, stably promoting the reform known as “first the license and then the permit”, along with pilot implementation of digital registration. In such ways, the reform has achieved the set goals and desired effects, including:
First, market vitality is enhanced. Six months after the reform, newly registered business entities reached 6.5959 million, a year-on-year increase of 15.75 percent, equaling 50,000 newly registered business entities every working day. Among them, there are 1.9270 million newly registered companies, an increase of 61 percent. There are 1.7656 million newly registered incorporated enterprises, an increase of 68 percent. Newly registered private companies reached 1.8226 million, up 64.34 percent. Newly registered foreign-invested companies reached 18,605, a gain of 9.82 percent in sharp contrast to negative growth for the previous two years.
Second, the industrial structure has been further optimized, and tertiary industry growth has been continuous and rapid. The reform has played an obvious role in leading emerging sectors: IT industries, culture and sports industries, entertainment industries, scientific research industries, technological service industries, and rental and commercial service industries have posted a far higher growth rate than other areas of the economy. Third, regional economic development has been promoted. The reform has led to an increasing proportion of companies in central and western China, reducing the gap with eastern China. Fourth, construction of the credit system has been promoted. Since the reform on March 1, we have launched a nationwide company credit information publication system. The sharing of information resources enables various parties to learn of company information in a convenient, timely, and thorough fashion, thus effectively expanding social supervision. Six months on, the market order is generally sound, with no rise in systemic and regional risk. Investor behavior is quite reasonable when applying for a license; their self-restraint and integrity have further increased.
Fifth, the reform has led to more business start-ups and created employment opportunities. Newly registered business entities have posted big increases; investors have not only realized their own self-employment, but also increased employment opportunities for others. Statistics show that between January and August this year, the number of people involved in individual private business increased by 18.48 million compared to the end of last year. Sixth, the reform significantly reduced the time and cost of registration. Statistics show that at 45 registration sites in Chongqing, for example, 58.2 percent of companies completed their registration in one day, 92.9 percent in three working days, and 100 percent within five days, a significant increase in work efficiency. Meanwhile, the subscribed capital registration system enables enterprises to invest money according to the normal demand of business operation, reduce their cost of establishing the enterprise, and increase the efficiency of capital.
The State Administration for Industry and Commerce will further deepen the reform of industrial and commercial registration system, promote the facilitation of the industrial and commercial registration system, and implement the measures proposed in the reform plan. The State Administration for Industry and Commerce will encourage local governments to issue regulations regarding simplifying the residence registration conditions. Currently 17 provinces have issued related regulations, while five provinces have authorized their prefecture-level governments to do so. We will urge those who have not yet issued such regulations to do so. We will relax other restrictions on enterprises, including name registration and business scope registration. We will follow the deployment of the State Council and carry out more research on the withdrawal mechanism of business entities, simplify and improve enterprise registration procedures, carry out reform regarding the whole-course facilitation of enterprise registration and so on. We will further implement “strict supervision” measures following “wide access.” The “Provisional Regulations on Enterprise Credit Information Publication” has been issued, and will take effect since October 1. We will also carry out a publication system of annual reports, and promote the implementation of the reform of ensuing supervision system. We will exert more efforts to support newly registered business entities and newly registered small and micro enterprises, so that they can better and enduringly operate.
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