Legislation streamlines licensing for Shanxi businesses

Getting government approval to start construction of a project was complicated and time-consuming two years ago in Shanxi province, but that's no longer the case thanks to a pilot program carried out by the provincial government.

The program, which allows a company to go ahead with construction if it pledges that all the building will be up to official standards, was written into a local law at the end of May.

"In 2015, I had to send 10 employees to at least 20 government departments for approval before construction could start. But now we can do that quickly with only one person," said Lyu Litao, head of Shanxi Wiser Technology Institute Co, an environmental protection corporation.

His company now has a 40,000-square-meter office building under construction. Lyu said the time needed to get approval for construction was shortened by two months compared with previous projects, saving about 15 million yuan ($2.2 million).

Lyu attributed that change to the pilot program, under which companies, after submitting a written document to the government promising they will abide by official construction standards, can begin the construction of certain projects without waiting for formal government approval.

For instance, the enterprise should promise that the project will not pollute the environment and all contractors are qualified.

Zhang Xiaoping, head of the development and reform commission in Jinzhong city in the province, said many companies complained about the complicated and time-consuming procedures to get approval on projects.

"Some enterprises took two or more years, but still failed to get approval. It was a waste of social resources and cost them valuable business opportunities," he said.

To optimize the business environment and help economic transformation, the provincial government launched a pilot program in 10 zones in July 2017, and then extended it across the province.

The pilot program also requires government departments to integrate abundant administrative items for approval into one platform and simplify related procedures to ensure contractors can get started as soon as possible.

So far, the previous 28 administrative items for approval have been cut to six, and the average time to deal with them has been shortened by four months.

"The regulation consolidates the reform's experiences and achievements through legislation," said Zhao Jianping, a senior legislator in Shanxi.

The new regulation also stipulates supervision measures such as more frequent random inspections on companies. If any violation is found, the corporation will be put on a blacklist, which will make it difficult for the company during annual evaluations and further business operations.