BEIJING — The Chinese central government has vowed to streamline administrative review procedures and leave less room for corruption in the intermediary service providers to which companies often have to resort in order to win approvals.
In a circular issued on April 24, the State Council, China’s cabinet, said going through intermediaries takes up too much time, that the process is prone to corruption, and that service providers impose charges arbitrarily and are highly monopolistic, thus increasing the burden on enterprises and the general public, and disrupting market order.
For enterprises to do business in China, third parties are sometimes needed to help them pass administrative reviews that government departments tell them are necessary. These third parties often have government links.
The circular said that intermediaries, especially those related to State Council departments, must clearly specify what administrative reviews companies must face, and that they should not introduce reviews that are not required by law.
In a bid to break monopolies, it said any qualified entity should be allowed to establish itself as an intermediary service provider, providing it does so legally. Government departments are forbidden from limiting the number of intermediary service providers, the circular stressed.
It also noted that “interest links”, or favoring candidates with government connections when licensing intermediary service providers, will not be tolerated.
Industry associations and commercial chambers that provide intermediary services must be separated from the review and approval body, and government officials must not work for the intermediaries, the statement said.