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China to step up efforts to overhaul intermediary service agencies

Updated: Jan 13,2017 3:02 PM

The first State Council executive meeting of this year was focused on “streamlining administration and delegating power”, which implies that administrative reform remains a major task for the government in 2017.

The meeting decided to overhaul intermediary service agencies and further eliminate approval items, in an effort to cut red tape for enterprises.

During the meeting, Premier Li Keqiang urged more efforts to ban corrupt intermediary services, especially those being manipulated by administrative departments or local governments.

“Tax burden for enterprises still come from institutional costs,” said Premier Li.

According to Qi Fanhua, deputy director of the governance research center at Renmin University of China, some local governments and departments abused their power by charging fees and misinterpreting the definition of economic benefits under the framework of market economy. And this illegal practice not only led to increased burdens for enterprises but a negative impact on the government’s image.

Recently, China has stepped up efforts to carry out an overhaul on approval items and intermediary services. Since October 2015, the State Council has removed over 300 intermediary service items from administrative approval procedures. And as of last December, the State Council has also disconnected 358 environmental impact assessment agencies from related departments, in an effort to avoid collusion between intermediary service and administrative departments.

Wang Manchuan, secretary of the China Society of Administrative Reform, said, “The government should on the one hand delegate power to intermediary service agencies while allowing them to run under the market mechanism; on the other hand, it should strengthen market supervision and regulation, with an aim to promote a more fair market environment.”