Reform to delink permits, licenses for better climate

China will take key measures to advance reforms for separating operating permits from business licenses as part of the ongoing efforts to energize market entities and create a better business climate, a new document said.

Starting July 1, China will adopt list-based management for all items requiring administrative approval across the nation, and more efforts will be made to further carry out reform pilots in free trade zones, said the document released by the State Council on Thursday.

The reforms will eliminate redundancy, change certain approval processes for record keeping, and establish a system for businesses to get the necessary notifications. By the end of 2022, the country will strive to establish business rules that are simple, efficient, fair and transparent.

According to the document, China will put an end to the phenomenon of "letting firms in but not letting them do business" in fields like foreign investment, foreign trade, engineering construction and transportation and logistics.

The country will also strive to relax market access in fields such as trade flows, education and training, healthcare, food and finance. More efforts will be made to cut back on the permits and certificates now required once a business license is issued, while administrative procedures will be simplified in sectors such as agriculture, manufacturing, production, services, consumption, telecommunication and energy.

Xiong Maoping, deputy head of the State Administration for Market Regulation, said the separation of operating permits and business licenses is a key part of the administrative approval system reforms, which will help further optimize the business environment, stimulate the market vitality and build a high-standard market system.

"It is necessary to innovate administrative management methods, improve administrative efficiency and promote the modernization of government governance systems and capabilities," said Xiong. "Especially, under the current situation ... it will boost the growth of more market players and help keep the fundamentals of the economy stable."

China has been ramping up efforts to deepen reforms and continuously foster a better business climate in the last few years. Effective measures to optimize the business environment have fueled a significant surge in the number of newly established market entities during the COVID-19 epidemic last year. The number of newly registered market entities in China reached around 25 million last year, up from 21.79 million in 2019, according to the National Development and Reform Commission.

Zhou Maohua, an analyst at China Everbright Bank's financial market department, said the government should continue to accelerate transformation of functions to better serve the market entities as well as take more steps to resolve any problems market players may face during the reform.

"Particularly, the local governments need to work hard on further reforms to streamline administration and delegate power, improve regulation, and upgrade services. Efforts should also be made to improve the business environment in line with world-class standards and formulate policies and detailed action plans based on local conditions," said Zhou.