Campaign targets defaults
The central government has vowed to prevent defaults in payment to private businesses by government departments and major State-owned enterprises, according to a statement released after a State Council executive meeting on Nov 9.
According to a decision at the meeting chaired by Premier Li Keqiang, the General Office of the State Council will lead a targeted campaign to prevent defaults in payments to private businesses by the public sector.
The statement said there will be zero tolerance for defaulters and those found to have committed severe violations will be put on a blacklist and held accountable.
Local authorities and government departments will be subject to punishments including deductions in their treasury deposits.
The cash deposit that is required in the engineering construction sector will be further standardized, and the cost for commercial debt defaults will be raised by a large margin, the statement said.
The meeting on Nov 9 also underlined the importance of better leveraging government-managed guarantee funds to make more financial resources available to micro and small companies.
The statement said that supporting agricultural and rural development as well as small companies should be the priority of all government-managed guarantee and re-guarantee institutions. Small and micro-firms as well as entities engaged in agricultural and rural development with a guarantee volume of up to 5 million yuan ($720,000) per entity will the primary beneficiaries.
The statement said that the State Financing Guaranty Fund should not set its guarantee fee rate higher than provincial institutions. Risks should be shared, with both the State Financing Guaranty Fund and financial institutions shouldering no less than 20 percent of the risk.
Business red tape to be cut
China will continue to cut red tape and widen the market access as part of measures to improve the business environment, according to guideline released by the State Council General Office on Nov 8.
The guideline highlighted the importance of launching more reforms to facilitate private and foreign investment and create a more enabling market environment.
It recognized a number of weak links and problems in the country’s business environment, including corporate burdens that are yet to be reduced and difficulties faced by small and micro businesses in their financing procedures.
As part of efforts to improve the business environment, more measures to widen the market access will be rolled out. Restrictions for foreign investment outside the negative list will be cleared across the board before March, the guideline said.
Local authorities and government departments are required to select a slew of high-quality projects in areas including civil aviation, railways, road transport and telecommunications to attract social capital.
More targeted measures will be unleashed to solve the funding problems for private businesses, with the China Banking and Insurance Regulatory Commission urged to come up with measures to encourage financial institutions in the banking sector to step up credit support for such businesses.
The government will further cut licensing red tape for businesses, with more measures adopted to cut the time needed to start a business.
The time required to start a business in major cities will be cut to 8.5 days before the end of this year, and online access for such services will be further promoted. Product categories requiring official licensing for production will be further cut, and the time required for patent registration will be shortened to six months, the guideline said.
A special oversight campaign will be conducted regarding the equal treatment of foreign-invested enterprises in areas such as government procurement, subsidies and required qualifications. Local authorities are also required to establish a provincial-level mechanism for filing complaints for foreign-invested enterprises.
More measures will be adopted to protect property rights, including intellectual property rights. Authorities are urged to step up law enforcement in online shopping, import and export sectors targeting intellectual property rights infringements.