China Further Cuts Administrative Examination and Approval Items

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Aug. 1 – As part of the country’s initiative to transfer government functions, China’s State Council released the “Decision on the Cancellation and Adjustment of 50 Administrative Examination and Approval Items (Guofa [2013] No. 27, hereinafter referred to as the ‘Decision’)” on July 13, which cancels and adjusts 50 administrative examination and approval items. Detailed information can be found below.

The Decision has delegated the examination and approval power to lower-level authorities for the following items:

  • Approval for the establishment of wholly-owned hospitals by Hong Kong, Macao and Taiwanese investors;
  • Approval for the establishment of audio and visual reproduction entities;
  • Approval for the establishment of electronic publication reproduction entities;
  • Approval on the issuance of electricity business permits;
  • Examination of domestic TV programs that feature foreign producers;
  • Approval for short-term practice by foreign medical groups; and
  • Examination of the products related to drinking water safety (excluding those featuring new materials, new techniques and new chemical substance).

The Decision has cancelled the following administrative examination and approval items:

  • Approval for disinfectants and disinfection apparatuses (excluding those featuring new materials, new technology and new sterilization principles);
  • Verification on qualification of institutes that appraise chemical toxicity;
  • Approval for the import of equipment needed for films co-produced by Chinese and foreign partners;
  • Approval for the exhibition and promotion of domestic publications abroad; and
  • Approval for general film screenplays.

In another move, the State Council released a circular concerning the abolishment and amendment of some administrative regulations on July 18, which abolishes the Administrative Measures for Coal Production Licenses; and at the same time, amends several items contained in 25 administrative regulations and transfers them to lower levels.

The circular has cancelled the following administrative examination and approval items:

  • Registration for entry-exit express enterprises’ inspection and quarantine businesses;
  • Examination of foreign cooperation contracts in the oil, natural gas and coal-bed gas sectors;
  • Registration of science and technology awards given by social organizations;
  • Approval for hiring principals by schools run jointly with overseas partners;
  • Approval for the establishment of tobacco product trading markets;
  • Approval for the establishment of national chain outlets for publications; and
  • Approval for tax declaration methods chosen by taxpayers.

Moreover, the circular has delegated some items from central government departments to provincial-level departments, including the export of animals for scientific experiments and registration of resident representatives of foreign companies.

For some time now, the over-regulated administrative approval system in China has led to unnecessary government intervention in the country’s economic development and resulted in both low market efficiencies and instances of bureaucratic corruption.

Over the past decade, China’s central government has cut and adjusted 2,497 administrative approval items, and the country aims to cut the existing 1,700 administrative approval items by at least one-third in the coming five years.

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