The process for applying for investment approval from the government needs to be streamlined, Premier Li Keqiang said at the State Council executive meeting on Feb 6. To this end, a platform that reaches across the various government branches that makes the application process more standardized and efficient is needed.
“People at the grass-roots level were confused and did not know why there were so many government branches doing the examination and approval work,” shared Li, who investigated the process.
For example, when Premier Li inspected the process in the Nansha district of the Guangdong Free Trade Zone (FTZ) on Jan 5 this year, he was shown an investment approval flowchart which was four meters long and needed nearly 800 days to go through.
“It gives me a headache to look at that flowchart. It requires not only the central government, but also city-level and county-level governments to make pre-approval without any time limit,” said Li. At the executive meeting on Feb 6, the Premier mentioned the flowchart again, “Approval time is cut by 80 percent thanks to administrative streamlining in Guangdong province. However, there are still some items which require a long time to gain approval — some needing up to a year.”
Premier Li pointed out that the most significant problem was that pre-approval takes too much time for entrepreneurs seeking investment.
“There is a “green channel” if you want to speed up the process. But you need to seek personal relationships, or even add money,” the Premier said in a serious tone. “I don’t understand how we can uphold the standard in this way. The ones who possess public responsibilities are using their positions for personal gain.”
Premier Li stressed that a coordinated supervision mechanism should be established to reform the government’s handling of investments. Every pre-approval should be proper and legal.
The Premier also emphasized that there should be time limits on the process of applying for approval.
“Several days ago, I heard that a project was not approved by a department which has little relation with it, “the Premier said. “Investment projects should be classified and irrelevant departments should not get involved.”
He added that every ministry should handle its own businesses first. He also demanded time limits for approval, online records for processing information, and a yearly report for supervision results.
“It should be a strict rule that the approval time for each project should be listed,” said the Premier. “The market players should know their estimated cost.”
The Premier said that how the new policy is implemented is much more important than how it is phrased.
“The key to reform is to clarify the relations between the government and the market by improving systems and mechanisms,” said the Premier.