The local government of Shanghai is cutting through red tape to satisfy the World Trade Organization (WTO).
The city currently has 534 rules relating to issuing business licences, involving 65 local municipal offices.
The fact there are so many rules means there are no crystal clear criteria on who exactly should issue licences, which often leads to the misuse of officials' power and corruption.
Mayor Xu Kuangdi said: "Efforts should be made to reform the current administrative system to echo the practices of the WTO."
Some existing rules have set no time limit to approve applications even though the applicants have prepared all the documents needed.
"This shows some government departments just don't suit the needs of the market economy," the mayor said.
He stressed that without reforming the system, the business environment in the city won't improve.
The city has set up a special group to guide the reform work which should be completed early next year.
Experimental work is already being done in the city's Zhangjiang High-tech Park to practice a system based on registration at, instead of approval by, appropriate government departments.
Some rules involving small and medium-sized enterprises and private firms have also been changed.
"Doing so will help change the work style of government officials and will give equal treatment to foreign investors," said Xu.
The city government considers reform to be one of the ways to introduce more foreign capital which would be a strong stimulus to economic development.
Between January and October this year, the city approved projects worth US$4.1 billion, up 16.7 percent on the same period last year.
"With more foreign funds introduced, the city will be able to provide more job opportunities," Xu said.
He cited Songjiang Export Processing Zone as an example. The area is used to turn raw materials into products and has launched 69 foreign-funded ventures in the past two years, providing more than 9,600 jobs. Just US$25,000 of foreign capital can create a job.
If the city introduces an extra US$2.5 billion in foreign cash next year, it will be able to create 100,000 more jobs, the mayor said.
(China Daily 11/13/2000)