China to further improve business environment, lower institutional transaction costs

China will take further steps to foster an enabling business climate and lower government-imposed costs, to ease the burden on market entities and unleash their vitality, according to a circular issued by the State Council on Sept 15.

To remove hidden obstacles to market access for market entities, a negative list will be enforced, and all regions and departments should remove explicit and implicit barriers before the end of October, the circular said.

In addition, administrative approval and arbitrary certification will be regulated in industrial product manufacturing, circulation, and use. Unnecessary administrative approvals, inspections, tests and certifications will be canceled or improved.

It also requires regulating administrative approvals and registration, proactively exploring the reform of “one integrated license for one industry,” and further reducing procedures, materials, time and costs for applying for administrative approvals.

Government procurement and bidding should be regulated as well. Before the end of October, online handling of the entire bidding and tendering process in engineering construction, and cross-district and cross-platform recognition of digital certificates should be implemented.

Further efforts will be made to facilitate market entity registrations. By the end of this October, unified regulations in enterprise setup, registration change and inspection standards should be compiled. While gradually realizing integrated services for both domestic and foreign companies, online processing of foreign enterprise setup and registration change will be advanced, the circular said.

Unwarranted business-related fees will be redressed to ease the operation burden on market entities. Government charges and fines will be strictly regulated. Price oversight will be strengthened on public facilities such as water, electricity, gas, heat, communication and cable TV.

Financial infrastructure will be encouraged to reasonably lower transaction, trust, registration and clearance fees. Industry associations and chambers of commerce are prohibited from obtaining shared profits by forcing enterprises to get tests, certification and training at designated institutions.

The circular also requires lowering logistics service fees.

To further improve services for foreign enterprises, online and offline business-related services will be comprehensively improved, including popularizing applications of digital business licenses, contracts and seals. More efforts will be made to optimize services in investment and construction project approvals, cross-border trade and tax payments.

By the end of 2022, import and export online customs clearance should be put into practice at China’s major ports. By the end of November, 95 percent of tax payment services will be digitalized. And by the end of 2022, a paper-free digital invoice system will be built.

A system for direct delivery of preferential policies will be established to ensure policies concerning fiscal subsidies, tax and fee cuts, and employment support can be fully implemented.

In order to strengthen fair supervision to safeguard the legitimate interests and rights of market entities, regulatory information sharing and mutual recognition will be improved to avoid repetitive inspections.

Regulatory oversight will become more transparent, and the regulation items list at the provincial and city level will be completed by the end of 2022.

Efforts will also be made to safeguard fair competition among market entities, and enhance intellectual property rights protection, according to the circular.