China to practice list-based management for all items requiring administrative approval, implement category-based management of corporate credit risks

BEIJING, Jan. 4 (Xinhua) -- China will practice list-based management for all items requiring administrative approval, to regulate the exercise of power and provide more benefits for enterprises and more accessible services to the public, as decided at the State Council's Executive Meeting chaired by Premier Li Keqiang on Tuesday.

The meeting also decided to implement category-based management of corporate credit risks to make oversight fairer and more efficient.

"Both decisions are aimed at fostering a market-oriented, law-based, and internationalized business environment, continuing to deepen the reform of government functions and lowering government-imposed transaction costs, which are of great significance," Li said. "They are also required by the urgent needs at present as the market expectations now are relatively weak."

The meeting adopted the List of Items Requiring Administrative Approval Stipulated by Laws, Administrative Regulations and State Council Decisions (2022 Edition).

The meeting required all provinces, cities and counties to complete compiling their own lists of items by the end of the year, which shall put on the lists all the items requiring administrative approval as stipulated by law.

The essential information elements covered by the lists should be broadly unified across the country to see that the same approval item will be processed according to the same standards across different regions. The list compiled by a locality should not go beyond the scope of the list made by its higher authorities.

The meeting stressed that governments at all levels and competent departments must strictly follow the lists in exercising administrative approval. Procedures will be open and transparent, to allow companies to shape sound expectations. Implementation protocols shall be formulated for each and every item on the lists. Approval requirements, application materials, approval procedures and charging rates shall be clearly identified and released to the public. No additional conditions or restrictions should be imposed during implementation.

No administrative approval shall be required or implemented against the law over any item outside the lists. Disguised approval requirements in various names shall be overhauled, and the people responsible will be held to account.

Oversight will be intensified as stipulated by laws and regulations. Efforts will be made to specify, under each administrative approval item on the lists, the overseeing entities, key links, regulatory rules and standards. Priority will be given to oversight in the areas directly concerning public safety and health or possessing major potential risks.

Service efficiency will be bolstered. Practices including notification and commitment, integrated services and one-stop on-line services will be promoted in implementing administrative approval, to make it easier for businesses and citizens to access government services.

"Lower and predictable government-imposed transaction costs will enhance public confidence in the market and better unlock market vitality and social creativity. Rolling out these two polices now are enabled by the groundwork laid in the past," Li said. "We must stringently implement list-based management and ensure that market players are not disturbed over any item outside the lists, so that they can compete on a level-playing field in an open and transparent market environment."

To foster a market climate of honesty, good faith and fair competition, category-based management of corporate credit risks will be pursued in accordance with laws and regulations. Well-calibrated regulatory measures including oversight conducted through the random selection of both inspectors and inspection targets and the prompt release of results will be adopted to see that regulation will not stand in the way of honest businesses while making those of bad faith pay the price.

"Credit is the cornerstone of a market economy. Regulation will not stand in the way of honest businesses. Market entities of bad faith or with a poor credit record will face more frequent and stringent regulation and supervision," Li said.

A sound system of indicators for categorizing corporate credit risks will be formulated. Information will be collected in a timely manner involving business registration, record filing, administrative approval, administrative penalties and inclusion in the catalogue of business anomalies and the list of entities with serious acts of bad faith. On that basis, enterprises of all forms of ownership will be categorized according to their levels of credit risks on an equal basis.

The results of categorization will be used to make regulation more effective and to guard against behaving irresponsibly and arbitrary law enforcement. The proportion and frequency of sampled inspections will be reduced for enterprises with low risks, while those with high risks or with poor credit records will face targeted, increased random checks and on-site inspections.

Inter-agency coordination will be intensified, to exercise whole-process supervision on a priority basis over sectors that bear on public health and safety, such as food, drug and special equipment. Sound and effective oversight of new industries and new business forms and models will be explored, to leave room for their growth while ensuring full safety and security.

Risk monitoring and early warning will be enhanced. Big data analysis, monitoring of key indicators and other methods will be employed to identify anomalies and risks of enterprises as early as possible, alert the enterprises concerned as appropriate and front-load regulation and supervision, to defuse latent risks.