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From Bloomberg Business

Updated: Jun 4,2015 10:13 AM

China’s Premier sees crimson as red tape strangles reform push

The barb was one of dozens the premier has flung at cabinet officials and bureaucrats in an unusually blunt campaign against China’s stifling regulation. In recent weeks Premier Li Keqiang has scolded his ministers for being “too slow,” dismissed the pace of reform as “a joke” and mocked one local agency for forcing applicants “to prove your mother is your mother.”

Li decided to make an example made of one district in the northern port city of Tianjin last September, when he personally supervised as the 109 stamps needed to approve local projects were sealed in a box.

Locking up all the stamps in China has proved more difficult, even for the party’s No 2 official. Since April, Li has on at least five occasions publicly admonished cabinet ministers for “bureaucratic lethargy” and resistance to cutting import tariffs on consumer goods and other proposals.

The Premier has been using his executive powers to attack the problem. Li ordered ministries on April 21 to hand down policy decisions approved at State Council meetings within seven days. Last week, the Finance Ministry announced the tariff cuts Li had complained about, slashing levies on clothing, cosmetics, baby items and other consumer items.

Similarly, China’s three state-owned telecommunications giants pledged last month to cut mobile data fees and to increase the country’s slow Internet speeds. The announcement came after three rounds of public criticism from Li.

The success of another major party initiative — the two-year-old clampdown on rampant graft — may be having the unexpected side-effect of slowing efforts to cut red tape. The campaign has “frightened a lot of officials,” said Pettis, of Peking University.

“I suspect that many bureaucracies decided that the easiest way to avoid making mistakes was to avoid making decisions altogether,” he said.

-- Bloomberg Business