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新华网 2015-05-26 10:07




Full text of Chinese Premier's teleconference address on streamlining administration procedures, cutting red tape


Streamline Administration, Delegate Power, Strengthen Regulation and Improve Service to Deepen Administrative Reform and Transform Government Functions
-- The teleconference address on streamlining administration procedures, cutting red tape
May 12, 2015
Li Keqiang

简政放权 放管结合 优化服务 深化行政体制改革 切实转变政府职能

The major tasks of this conference are to review and summerize the situation of streamlining administration, delegating power, strengthening regulation and transforming government functions over the past two years and more, and deploy key tasks for the next phase to further deepen the reform.

I. To deepen administrative reform and transform government functions are a strong driving force behind and an important guarantee for development.

To transform government functions lies at the core of administrative reform. Economic reform is essentially about striking a balance between the government and the market by enabling the market to play a decisive role in resources allocation and the government to function better. The first task this government undertook after taking office is to advance administrative reform and transform government functions, with streamlining administration, delegating power and strengthening regulation being the first moves. For years, excess intervention and stifling supervision by the government over microeconomic activities as well as too much emphasis on review and approval to the neglect of regulation have sapped economic vitality, incurred high administrative costs and provided breeding grounds for corruption. To streamline administration, delegate power and strengthen regulation is a crucial step to address these acute problems. It tackles the crux of administrative and economic reform and what matters the most in improving the socialist market economy and enhancing social development. It is fair to say that this reform is right at the heart of all reforms with wide-ranging implications.

Over the past two years and more, notable results have been achieved in streamlining administration, delegating power and strengthening regulation. State Council agencies have canceled or delegated administrative approval power for 537 items, meeting two years ahead of schedule the pledged target of cutting the number of items requiring administrative approval by one third within the term of this government. The number of investment projects subject to central government approval is down by 76%. All overseas investment projects but for a few exceptional cases can now proceed without administrative approval. For companies seeking registration, they can have their business licenses issued to them before getting administrative permits; 85% of the matters that once needed pre-registration approval now only require post-registration approval; with regard to capital registration, the paid-in capital scheme has been replaced with a pledged capital scheme; and annual business inspections have been canceled in favor of annual information disclosure. The number of qualification accreditation and performance appraisal has been cut dramatically. At the central government level, 420 administrative fees and government managed funds have been abolished or reduced, relieving businesses and individuals of their financial burden by nearly 100 billion yuan every year. While delegating power, the government has taken measures to strengthen regulation both during and after projects. Local governments at all levels are earnestly implementing the decisions and plans of the central government and stepping forward to take over, delegate or fulfill responsibilities accordingly. Some provinces have moved faster in this regard, canceling or delegating administrative approval power for over half or, in the highest case, 70% of the matters. In some provinces, non-administrative approval has even become something of the past.

These reform measures have achieved multiple purposes. They have effectively emancipated productivity, unleashed market vitality and social creativity, helped with efforts to stabilize growth, adjust economic structure and improve people's livelihood, and facilitated the government in building governance capacity and a cleaner government. New market players have mushroomed, reaching 12.93 million last year with a 45.9% increase in the number of newly registered businesses. Despite the economic slowdown, 13.22 million new jobs were created in cities and townships. In the first four months of this year, the number of newly registered businesses grew by 10,000 every day on average and 4.45 million urban jobs were added. Over the last two years, faced with complicated domestic and external developments and growing downward pressure on the economy, we did not resort to massive short-term stimulus. Rather, we innovated the way we regulate the macro economy and deepened reform in all respects. As a result, the economy has continued to run within a reasonable range; records for job creation have been repeatedly set and broken; and the Chinese economy has remained among the fastest-growing major economies in the world. This is largely attributable to the effect of reforms including those to streamline administration and delegate power.

Reforms to streamline administration and delegate power have produced initial results, but they fall far short of what is expected by our people and what is needed by economic and social development. For one thing, the government, which still tends to overreach itself, has yet to relinquish power to the necessary extent. What's more, measures aimed at streamlining administration and delegating power are yet to be implemented fully. While obstruction abounds in the middle of implementation, there are also problems with both the first and the last miles in implementation, so to speak. This is partly due to the absence of the right mindset and management modality. It also has something to do with resistance from local and departmental vested interests. Businesses and members of the public complain that quite a few matters still need review and approval, only in a different form. The once explicit requirement for government approval has morphed into an implicit requirement for approval from intermediaries with government background. There remain multitudes of documents to be submitted for review and approval and a raft of procedures to go through. For many, the process of getting something done remains lengthy and difficult, because agencies are in the habit of shirking responsibilities to each other, seals and certificates of one kind or another are still a must, and there is a lot of toing and froing. Take the business registration reform for example. It is true that companies are now able to obtain a business license without first acquiring an administrative permit. But even with a license in hand, many people keep running into all sorts of difficulties, and sometimes they cannot get their businesses up and running simply because of a single missing permit, whose requirement may sound rather ridiculous. As a matter of fact, this can happen to officials present at today's conference as well as ordinary people. I believe you or your family members would encounter many of the above-mentioned problems in areas outside your purview. In the global context, according to the 2015 World Bank Doing Business Report, China ranks 90th out of 189 economies, though three places higher than last year. Too many restrictions like administrative approval are largely to blame. The ubiquitous requirement for approval, certificates, seals and documents of various types is a waste of time and energy for any individual and a source of fret and frustration. It consumes the human and material resources of a company and costs it market opportunities. It undermines justice and equity of a society, dampens entrepreneurship and innovation and, worst of all, suppresses productivity. It impairs the image and authority of a government and affects public mood and opinion. If no steps are taken to remove these constraints on social productivity, the shared interests of the entire Chinese population will suffer and the process of the great national rejuvenation of China will be held up.

Under the new historical circumstances, reform measures such as streamlining administration and scaling back administrative power are no expediency but important steps that both deliver short-term benefits and meet long-term needs. To realize the dual objectives of maintaining a medium-high-level growth rate and moving toward a medium-high-level of development, we need to foster new growth drivers through such reform as streamlining administration and scaling back administrative power. With a fluid situation, the world economic recovery is an uphill journey. The Chinese economy has entered a state of "new normal" and a critical stage where we need to deal simultaneously with slower economic growth, difficult structural adjustments, and the impacts of previous economic stimulus measures. In the first quarter this year, the economy faced many headwinds, but thanks to the targeted regulation measures we adopted since the second half of last year, the downward pressure has been somewhat offset. Now the economic performance is stable on the whole, with positive trends seen in some aspects. For instance, the surveyed unemployment rate dropped in April and industry has been rebounding. But still we are under considerable pressure in other aspects, for example investment is further decreasing. We must roll out more effective measures to sustain the upward momentum and resist the downward pressure. Fundamentally speaking, this requires the government to streamline administration and scale back its administrative power, ease restrictions and strengthen regulation where necessary, and improve services. We have both the confidence to keep the economic performance within a proper range, and the capability to reach the main goals for this year and maintain medium-high rate and level of growth for a fairly long time to come. We are confident because the Chinese economy has big potential, strong resilience, and ample space for readjustment. As long as we stay committed to deepen reform and strengthen the twin engines for economic growth, we will build up stronger and longer lasting force for development, and through hard efforts, bring about a new round of stable and enduring growth for the Chinese economy. Streamlining administration and scaling back administrative power is also essential for building a new system for an open economy. With profound adjustment in the global economic landscape and changing conditions of resource and production factors, our traditional competitive strengths are waning. Weak demand in the international market means heavy pressure for our imports and exports to grow. Therefore, we must speed up the building of an open economy and develop a network of high-standard free trade zones open to all other countries and an international and law-based business environment. We must explore the use of a management model based on pre-establishment national treatment and a negative list, foster and expand new competitive strengths in international cooperation. To achieve these, it is essential for the government to streamline administration and scale back administrative power, lift or exercise regulation where necessary and provide better services. I visited the four free trade zones, including the one in Shanghai. A major feature of them is streamlined administration and devolved administrative power that enable companies to get registered and investment projects to get started more quickly. To improve governance capacity, the government needs to deepen such reform as streamlining administration and scaling back administrative power. The government should withdraw from certain areas as needed so as to do a better job where its role is duly required, just as "cutting off extra branches and leaves helps to make the trunk stronger", so to speak. Only when the government further delegates power where necessary, focuses on where regulation is needed, and provides adequate services, can it be possible for us to come up with new practices in governance, and better meet people's will, promote development and facilitate social harmony.

To encourage all people to start their own business and make innovation, we need to streamline administration and scale back administrative power, reform that will remove obstacles and set a proper stage. History is created by the people, and a country's prosperity and progress must be driven by its people's creativity. By encouraging our people to become entrepreneurs and innovators, we hope to leverage their role as the masters of the country and their unlimited creativity so that our people can all participate in modernization and share in the benefits of reform and the fruits of development.

- Encouraging start-ups and innovation will boost development, increase people's wealth, promote social equity and strengthen the country. It is therefore an integral part in building socialism with Chinese characteristics. To encourage start-ups is conducive to creating more jobs, increasing people's income and boosting domestic demand. At the same time, it enables people to live a more fulfilling life. It is also the surest way to realize common prosperity for our people. Redistribution alone is not enough to narrow the income gap. Primary distribution should be the main approach to enable more people to get rich. Reality on the ground already shows that where there is a more enabling business environment and a larger number of start-ups, the local economy will be more vibrant, income higher and wealth gap smaller. We now encourage the general public to make innovation. This is intended to foster a culture of innovation in our society. In such a society, we will have more fertile soil for innovation, a stronger push for innovation and a greater impact from innovation. To encourage start-ups and innovation by the public will enhance not only the "hard power" of the national economy but also the soft power of the country. It serves the fundamental interests of the public and meets the needs of each and every worker. A country where start-ups and innovation thrive must be one of promise, energy and progress.

-Encouraging start-ups and innovation is not just relevant for individuals and newly established companies. In fact, well-established companies, including the bigger ones, should also keep their vitality and competitiveness through entrepreneurship and innovation. Just have a look at those successful companies with staying power. With no exception, they are the ones who keep up with the times and constantly innovate and forge ahead. Otherwise, they would have closed down a long time ago. In recent years some big companies have recognized the trend of Internet development and personalized consumption, and remade their management model. They have reshaped the traditional hierarchical management model into new platforms for their employees to pursue entrepreneurship and innovation. Such platforms are also open to the society. Employees can apply the novel ideas nurtured on such platforms in their own work or with a third party. As such, the company has thus become a big hub of resources for innovation. It can support more small- and medium-sized companies, boasts stronger capacity for innovation and can deliver more diverse products. There is a great deal that businesses can do in tapping their entrepreneurship and innovation.

- We have unique strength in encouraging start-ups and innovation. China has over 1.3 billion people, including a 900-million-strong workforce. The average education level of our working-age population is 10 years, higher than the world average. The education level of our newly added workforce has reached 13 years, approaching the average of medium developed countries. There is huge untapped potential for human resources to be turned into human capital. Meanwhile, we also have over 70 million market entities, including over 18 million companies. Our people and market entities have strong desire for entrepreneurship and innovation, but many have been held back by both tangible and invisible restrictions. We therefore must deepen reform to streamline administration and scale back administrative power. This will get rid of the obstacles and enable our people and market entities to travel light and grow stronger. We have mapped out reform plans for the Shanghai Pilot Free Trade Zone, which has attracted a large number of domestic entrepreneurs, financial companies, and intermediaries, as well as foreign companies. Speedy progress is also being made in institutional reform in the free trade zones in Guangdong, Tianjin and Fujian. Experience gathered in these free trade zones must be timely applied to the rest of the country so that China, with an improved business environment, stands out as the most appealing destination for foreign investment.

The progress achieved in the past two years fully testifies to the effect of deepening reform through streamlining administration and delegating government power. In fact, we have learnt about the importance of such reform from the course of China's history, especially from the success of the reform and opening-up program over the past 37 years. The several-thousand-year-long Chinese civilization provides useful references. In this year's Report on the Work of the Government, I quoted an old Chinese saying that "good governance should be simple in its exercise" and stated that "power should not be used arbitrarily". It was echoed by the deputies to the National People's Congress. My inspiration comes from the ancient Book of Rites, which teaches us that "good governance, when exercised, brings the world together as one community (See Chapter: the Conveyance of Rituals)." And according to the Analects of Confucius, one should "hold the people in reverence and be simple in the measures he takes" when governing the people (see Chapter: Yong Ye). In other words, the job of the government is to keep the people's interests at heart and hold itself accountable to the people at all times while minimizing its intervention and interference in people's lives. The book then goes on to say that "it would be rather unacceptable to be simple both in the way that the government relates to the people and in the measures that it takes." Put simply, if the government exercises power by treating the people as nothing more than just simple subjects, it would be irresponsible and even disrespectful of moral standards. Historically, the prosperity of a dynasty usually came from good simple governance, from freeing the people of levies and taxes to allow them to rest and recover, whereas the decline or demise of a dynasty was usually brought by doing just the opposite, as a bad government, as an old Chinese saying goes, "is more dreadful than a wild tiger." The reform and opening-up process, which began following the Third Plenum of the 11th CPC Central Committee, has led China to remarkable progress. This is one recent example of how good governance, simple in exercise, has achieved the purpose of lifting restrictions and unleashing people's ingenuity by way of reform and opening-up. For instance, rural land reform was conducted in the 1980s with the introduction of the household contract responsibility system, which gave farmers full autonomy in the operation of their land and quickly improved their livelihood. That being said, the delegation of power does not mean zero regulation, but rather better service on the basis of better regulation. China's history over the past several thousand years as well as its 37 years of reform and opening-up shows that over-regulation stifles progress. Only by removing restrictions could we spark creativity, unleash and expand productivity and steadily raise people's living standards. To sum up, the key to good governance is respect for the people and the principle of simplicity in the exercise of government power.

Our overall goal of deepening administrative reform and transforming government functions is to streamline administration and delegate power, combine power delegation with effective oversight, and improve service all in a coordinated way. Such a three-pronged approach will encourage mass entrepreneurship and innovation and mobilize the initiative at the central and local levels. It will help promote sustained and healthy economic and social development, cultivate a law-based, innovative, clean and service-oriented government at a faster pace to meet the requirement of the socialist market economy and socialism with Chinese characteristics, and eventually build up modern governance capacity. In this process, it is important to learn from the wisdom and fine traditions of our ancestors, such as the belief that "good governance should be simple in exercise", and apply it in the modern-day context to let labor, knowledge, technology, managerial expertise and capital play their full part in invigorating the market, open up all sources of social wealth and give all members of the society an equal opportunity to discover and realize their full potential. By so doing, we will be able to build new engines of growth, create fresh prospects for social progress, unity and harmony and ensure that our nation will always be a place full of vitality and dynamism.

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