Xi Yanchun (host):
Ladies and gentlemen, good afternoon. Welcome to the policy briefing of the State Council. Today, we have invited Liu Yuting, deputy head of the State Administration for Industry and Commerce, and Cheng Jianlin, deputy secretary-general of the National Development and Reform Commission (NDRC). Mr. Liu will talk about commercial system reform, and Ms. Cheng will outline policies on further expanding domestic consumption.
Several heads from such ministries and departments as Civil Affairs, Culture, National Health and Family Planning Commission, and the General Administration of Sport and National Tourism Administration are also invited to answer questions about the second topic of expanding domestic consumption. You are also welcome to ask them questions.
First, Mr. Liu will introduce the first topic - commercial system reform.
Liu Yuting:
Good afternoon, friends from the press. I am very glad to have this opportunity to discuss commercial system reform with you. Premier Li Keqiang has attached great importance to commercial system reform and issued several related instructions. Thanks to his efforts, integration of the business license, taxation registration certificate and organization code certificate, or “three-in-one business certificate,” was completed at the end of 2015. This year, at a national teleconference on administrative reform and at the 134th executive meeting of the State Council, the Premier called on further pushing commercial system reform by integrating two more certificates – social insurance and statistics registration license - with the three-in-one business certificate, creating a five-in-one model. This is a great move to help reduce enterprises’ institutional costs and expand commercial system reform. Since Oct 1, the five-in-one business certificate has been implemented nationwide. By Oct 20, a total of 768,100 such certificates were issued.
This year, the State Administration for Industry and Commerce has been promoting commercial system reform with a focus on widening market access and improving business registration facilities by taking measures such as online registration and e-business licenses. The five-in-one business certificate not only reduces enterprises’ institutional cost for starting up business but also improves administrative efficiency. The business registration now takes only two or three workdays instead of the former several months with five or six departments getting involved.
By the end of September, the number of market entities in China reached 83.72 million, and among them were 24.63 million enterprises, a year-on-year increase of 18.5 percent. In the first nine months of this year, the number of newly registered market entities was 12.12 million, up year-on-year 13.7 percent, with a daily average of over 40,000. The number of newly registered enterprises was 4.01 million, up year-on-year 27 percent, a daily average of 14,600. Before the reform, the number of daily registered enterprises was 6,900.
Meanwhile, our survey of newly opened micro- and small-sized enterprises showed 69.6 percent were actively operating in the third quarter this year.
All these number indicate that commercial system reform is seeing results and providing new drivers for China’s economic development.
Liu Yuting:
In the next phase, we will continue to advance business registration reform in accordance with the requirements of the State Council executive meeting, focusing on the following aspects:
First, based on local governments’ experience in “merging five certificates into one”, integrate more certificates and documents to further streamline administration, lower the institutional costs for starting a business, shorten the time required for business registration and enhance the “sense of gain” for startups.
Second, promote online business registration, strengthen guidance on pilot projects, explore more safe, reliable and convenient identity verification methods and electronic certificate system, promote sharing and recognition of registration information among government departments, in an effort to implement full-process electronic business registration across the nation.
Third, continue to eliminate pre-approval items for business registration by a third and cancel more than 50 post-approval items by the end of this year.
Fourth, improve the exit mechanism, sum up the experience in testing a simplified process for dissolving enterprises and promote the reform across the country by the end of this year; set up an exit mechanism for market players with both regular and simplified cancellation systems.
Fifth, actively and steadily push forward the reform of business name registration management system, continue the reform of facilitating business registrations, make efforts to build a relaxed and convenient entry environment for market players.
That concludes my introduction, thank you.
Xi Yanchun (Host):
Next, let’s welcome Ms. Cheng to introduce policies on expanding domestic consumption.
Cheng Jianlin:
Ladies and gentlemen, friends from the press, good afternoon. I am very glad to meet everyone here. And I would like to take this opportunity to thank you for your long-term support and concern for NDRC’s work. The CPC Central Committee and the State Council have been attaching great importance to expanding domestic consumption. And this year, President Xi Jinping and Premier Li Keqiang have made several important instructions on this issue. NDRC has, in conjunction with over 20 related departments, conducted in-depth studies on the current situation and development trends of domestic consumption as well as on the restraining factors, and submitted policy suggestions on further expanding consumption in key areas such as tourism, culture, sports, healthcare, elderly care and education, which were approved by the State Council executive meeting on Oct 14. As everyone knows, China has entered a stage featuring increasing demands on consumption, accelerated upgrading of consumption structure and enhanced role of consumption in driving the economy. In the first three quarters of this year, retail sales of consumer goods grew 10.4 percent year on year, basically the same as last year. The growth rate in September stands at 10.7 percent. The driving role of consumption has been significantly enhanced, with a contribution rate of 71 percent to economic growth in the first three quarters, up 13.3 percent from last year. The demands for consumption in tourism, culture, sports, healthcare, elderly care and education have shown faster growth and greater potential.
However, the adjustment and upgrading of these sectors still lag behind the changes in demands, mainly reflected in insufficient supply of high-quality products and services, restraining the expansion and upgrading of consumption.
Cheng Jianlin:
The policies on expanding consumption introduced by the 150th State Council executive meeting are aimed at solving the main problems facing us. These policies mainly cover the following aspects: first, further expanding service consumption and improving consumption quality, including removing institutional obstacles for consumption in elderly care, education, sports and other sectors, and increasing effective supply in tourism and culture; second, promoting the expansion and upgrading of traditional consumption by unifying the quality standards of consumers goods sold in the domestic market and for export; third, continuing to optimize the consumption environment by increasing support for infrastructure construction and setting up standards for “smart homes”.
The document has three major characteristics: first, it highlights increasing the supply of high-quality products and services, improving weak links and people’s livelihoods; second, it focuses on breaking institutional obstacles and stimulating the enthusiasm of market players with innovative measures; third, it is aimed at enhancing consumers’ willingness and confidence, and building a good consumer market environment.
That concludes my introduction, thank you.
Xi Yanchun (Host):
Now it’s time for questions.
China Radio International:
Ms Cheng, as you said, consumption growth this year has been rising steadily, and its contribution to economic growth accounted for 71 percent. What do you think of consumer trends in the next step?
Cheng Jianlin:
This year, consumption has played an important role in growing China’s economy, and the contribution rate of consumption to economic growth in the first three quarters increased 13.3 percent from the previous year.
Consumption rate in China has been rising steadily since 2000, to 52.8 percent by 2015. As the consumption structure keeps changing, it is playing a bigger role in driving the economy forward.
There exists huge consumption potential. First, people’s demands for high-quality goods are still growing. People focused on basic product functions before, and now pursue safe, useful, exquisite, and comfort products. In the last two years, SUVs, a kind of high-quality and comfort vehicle, and convenient smart phones with multiple functions and high pixel, such as Huawei, have seen good sales.
Cheng Jianlin:
Second, there is huge consumption potential in the high-quality service sector. People’s demands in services for tourism, culture and sports are rising. During the National Day holiday, the number of tourists hit near 600 million, bringing revenue of 500 billion yuan nationwide.
People like to watch major sporting events live. However, few sporting events are scheduled for the holidays. I think this presents opportunities for companies.
People’s demands in culture services are also growing. For instance, box-office revenue continued to grow to over 40 billion yuan in the last year.
Cheng Jianlin:
Third, in rural areas, consumption potential remains huge. With the improvement of communication and infrastructure and increases in farmers’ income, rural residents’ consumption rate outpaced urban dwellers’. Also, the State Council recently decided to speed up urbanization through a plan to provide 100 million people with urban hukou.
The scale of consumption will increase with accelerated urbanization. The plan stipulated a target of 45 percent urbanization for migrant urban residents in the next five years, which means that each year, 13 million people will get their urban hukou. They can have potential access to higher salaries and ability to purchase more goods and services.
Cheng Jianlin:
Fourth, there remains more room for consumption growth compared to the international community. China’s consumption rate is lower than developed countries, accounting for 70 percent of the average rate internationally. Therefore, I think China will see a stage of upgrading traditional consumption and booming emerging consumption in the future. Thanks.
China News Service
How do the ongoing “five licenses in one and one license one code” reform and the upcoming “multiple license in one and one license one code” specifically benefit people?
Liu Yuting
Both reforms involve business licenses. As far as we know, there are four types of business licenses. First is tax registration certificate and organization code certificate required after enterprises acquire a business license. Second is for running the business, such as banking account permission. Third is for specific business activities, such as customs declaration registration. Fourth is for specific trade or industries like production license.
Multiple licenses or permits are required from enterprises to operate a business, and the “five licenses in one and one license one code” reform only touches upon the licenses required for all enterprises without covering the administrative permits. Judging from the trial carried out in some local areas, the “multiple licenses in one and one license one code” reform combines all the licenses needed for the practice of usual business and partial registration permits for enterprises in specific industries. And some trial areas have added other permits or licenses to the five basic licenses.
Liu Yuting
The thinking behind “multiple licenses in one and one license one code” reform came from actual practices in some areas. According to last week’s State Council executive meeting, the reform should follow three rules. First is to follow the reasonable basis when it is involved with business license or permission. Second is to follow the principle of streamlining administration, deepening reform and delegating power before deciding whether any license should be removed. Third is to ensure the full function of the license through information sharing and license integration.
The reform is aimed at providing an easier environment for enterprises and taking advantage of the information and databases. So “multiple licenses in one” is intended to achieve the goal of enterprises needing only one business license. The all-in-one license will contain all the records and information required for any business practices. And the goal can only be met through information sharing and business coordination between government departments.
CCTV：
Ms. Cheng, the official statistics showed that the GDP for the first three quarters grew at 6.7 percent respectively. Is it a coincident number? I think the GDP growth owes largely to consumption. Currently many places have seen rising of house prices. Will it affect the future consumption? Thank you.
Cheng Jianlin:
The GDP for the past three quarters grew at the same pace of 6.7 percent. But the composition of the GDP was changing. The growth of the primary industry is rising with the changes of seasons. Agricultural production was relatively low in the first quarter due to the climate change and was gradually increasing in the second and third quarters. The secondary industry also witnessed ups and downs, growing at a slower pace in the first and third quarters, and at a faster pace in the second quarter. And the growth of the tertiary industry for the last three quarters was comparatively stable.
And the demand structure also saw changes. Investment, consumption and imports and exports all grew quite steadily. Fixed asset investment grew at 10.7, 8.2 and 7 percent respectively for the last three quarters. The import and export in China began to suffer negative growth since last year, down 11 percent in the first quarter and 5 percent in the third quarter. Investment was decreasing, consumption was increasing and trade was slowly recovering.
The 6.7 percent growth is not coincidental. China’s economic development mode is changing. The real driver of China’s economic growth is the upgrade of industrial structure and transformation of growth drivers. Over the past three quarters, the contribution of the domestic demand to the economic growth was gradually increasing.
And the service sector maintained rapid growth of over seven percent. The tertiary industry accounted for 52.5 percent of GDP growth in the first three quarters, up 1.6 percent year-on-year. This is an important symbol of industrial structure upgrade. The transformation of growth drivers mainly depend on reform and innovation. And, this government has been emphasizing streamlining administration and delegating power and improving public services, thus promoting mass entrepreneurship and innovation. It hopes that accelerating the nurturing of new growth drivers will speed up the growth of new technologies, new products and new businesses.
Since the reform of the commercial system, the growth of newly registered enterprises has rose quickly, 14,600 per day in the first three quarters. The production of new energy cars, industrial robotics, integrated circuit and smart phones have been growing at a fast pace. As the traditional industries such as energy and materials have slowed their pace, new high-tech industries have witnessed rapid growth. Continued optimizing and upgrading of industrial structure and speeding up of transformation from older growth drivers to new ones have guaranteed an overall stable and rapid economic growth.
Actually housing consumption played a big role in this year’s economic growth, taking up about 8 percent of GDP growth. But we can see that house prices only rose quickly in 16 hotspot first tier and second tier cities and remained quite stable in third tier and fourth tier cities. We all see that more than 20 cities took measures during the National Day holiday to control the rapid rising of house prices and also increased the supply of land.
China National Radio
Currently, enterprises can register their business through the internet, which has largely improved the efficiency of the registration process. Could you tell us how the online registration procedures work, please? Thank you.
Liu Yuting
Enterprises or applicants should first provide an electronic version of all registration materials to the registration department through the internet and wait for approval. After the approval, they should again provide paper materials to the departments to acquire the license. Next, we plan to use electronic registration through every procedure, from application, approval to publicity.
Zhou Shiping
The online registration is one of the ways we are using the internet to further promote administration streamlining. All levels of the Administration of Industry and Commerce (AIC) have carried out the reform in registration system since 2008, and 22 provinces have opened online registration systems for enterprises. In Beijing, over 60 percent of business registrations have been completed through the online system, and name registrations have been shortened from five days to 1-2 days.
Enterprises now need to go through both the online service and the traditional service in person. According to the reform plan, we have a trial run on the all-electronic registration. Based on the trial run, some technology and legal issues, including security checks for applicants’ identity and legal validity, still exist. However, new technologies are being studied and developed, and related regulations are also being improved, which can ensure the success of all-electronic registration on both technological and legal basis and further improve the registration efficiency.
China Economic Information Service:
Mr Liu, you just mentioned that the government will further improve the online system for enterprises’ credit information. Could you talk more about the system?
Liu Yuting:
In the past, corporations had to receive annual checks by the government. But the business system reform cancels the checks. Instead, they should open their annual reports to the public through the online information system.
The report should include their registration information, any sanctions they received, credit score, address, asset and shareholders’ information.
After the reform, enterprises will be supervised not only by the government, but also by the public. People can easily learn more about them.
As of the end of September, the online system was visited more than 25 billion times, reflecting the high degree of interest.
Another point in the online system is that it can integrate enterprises’ information registered with different government sectors, so that they can be shared by authorities at all levels and the public.
In the past, enterprises had to register different information with different government departments and levels. For example, some companies may leave their registration information with the municipal government, while leaving the administrative approval information with the provincial government.
In August 2016, the State Council issued a circular urging the integration of enterprises’ information, including registration, administrative approval, punishment and check results, through the online system.
Now we are busy working on it. It is a challenging job because 56 departments in the State Council must collaborate.
In addition, we are now upgrading the online system, making sure that an updated version will be available by the end of 2016.
Thank you for your attention on this issue. I hope that the press will support our job.
China Daily:
I have a question for Ms. Cheng. Consumption sector now faces an outstanding problem in insufficient supply of high-quality goods and services. How will enterprises and social capital be guided to promote effective supply? Thanks.
Cheng Jianlin:
In our daily life, we can sometimes feel the lack of high-quality goods we want to buy at the market, which actually is a shortage problem of quality supply. The State Council’s recent executive meeting decided to remove institutional hurdles and support more social investments in the weak links of the consumption sector.
The following three aspects are mainly constraining effective supply. First, a defective institution exerts negative effects. People may have interest in sporting events, but the demands of such consumption cannot be met due to a defective management system. Second, supportive policies on consumption fail to cover all products currently. The third problem is that people are not willing to spend money in a less standard market.
Consumers’ rights protection needs further enhancement. Poor-quality goods and services and insufficient infrastructure are bringing inconvenience to consumption. Now with the release of the document, related departments will work together to increase structural reform in consumption sector and increase effective supply.
Cheng Jianlin:
The document put forward measures to remove institutional obstacles hindering old-age services, education, and sports services. To improve the inefficient use of sports facilities, the government will promote openness of sport facilities at colleges and enterprises. Also, the government will make efforts to innovate the management model and bring in social capital.
The document also decided to set up a support system for consumption policy; for instance, the green consumption policy will include more products in the energy-saving plan, which encourages consumers to purchase energy-saving and environmentally friendly products. In addition, the document urged to optimize the consumption environment. The market lacks unified standards and supervision system concerning the fast development of wearable devices and new technology products. Therefore, we will accelerate setting standards and applications in this area.
In another example, some consumers do not trust home-grown products, and prefer to go abroad to buy products. In order to enhance consumers’ trust, the General Administration of Quality Supervision, Inspection and Quarantine of China called for a unified quality and standards for products that are on sale domestically and for exports, that is to say, to be produced in the same production line under the same standards. The move will first be tested in food export enterprises, and then expand to commodities for daily use, as an effort to boost consumers’ confidence in domestic consumer products. Moreover, infrastructure in tourism and elder care are insufficient. We will continue to promote the six major consumption projects, which include the sectors of tourism, health and elder care, culture, information, and sports. In general, the policy system is expected to be improved to unleash the vitality of social capital and motivate enterprises to enhance product quality and services.
Xi Yanchun:
That’s it for today’s policy briefing. Thank you all.
