China to further streamline procedures for opening businesses, better regulate fees

China will work to further shorten the time required for starting a business and better regulate the charges on businesses from industry bodies and associations, in an effort to lessen corporate burdens and spur their vitality, the State Council’s executive meeting chaired by Premier Li Keqiang decided on June 24.

The Chinese government puts strong emphasis on fostering an enabling business climate. General Secretary Xi Jinping recognized the business environment as the soil nourishing corporate development, and underlined the imperative to deepen reforms in key areas to foster a world-class, market-oriented business environment governed by a sound legal framework. Premier Li Keqiang highlighted the need for transforming government functions and improving the business climate as key steps in China’s reform and opening-up, and major reform measures in properly handling the relations between the government and the market. These reforms must be persistently pushed forward.

The World Bank's Doing Business 2020 released in October 2019 ranked China 27th in ease of starting a business among 190 economies, up by 66 spots from two years ago.

To advance the six priorities where stability is key and the six where protections are needed, the meeting on June 24 urged giving higher priority to supporting market players.

“Facing the mounting economic challenges, we need both fiscal policy measures and deeper reform of government functions for a more enabling business environment to effectively support market players. This way, we can spur greater market vitality,” Premier Li said.

The procedures and services for starting businesses will be optimized. A unified online platform for accessing these services will be established in every province by the end of this year, where applications can be filed online in a single form. And once approved, related documents can be collected at one single venue.

With strict oversight and security protection put in place, electronic business licenses will be promoted, as a legal and valid identification and means of e-signature for online business registration, tax-related services and opening of bank accounts.

Efforts will be made toward reducing the time required for starting a new business, from five working days to no more than four.

This is both an institutional arrangement and a measure to facilitate business operation under COVID-19 containment. It will help more businesses emerge and keep employment stable.

The meeting on June 24 adopted measures to better regulate the fees charged by industry bodies and associations, and specified five instances where unauthorized levy of fees is prohibited.

Industry bodies and associations must not force enterprises to get enrolled and pay fees by using impact of government departments or their influence.

No unwarranted charges should be introduced on the grounds of statutory mandate or government-commissioned matters.

No charges will be allowed for contests, performance evaluations or commendations.

Unsanctioned charges are banned for certification of professional qualifications.

And charges imposed before services rendered or repetitive charges will be forbidden.

“Arbitrary levy of fees must be resolutely dealt with. Some industry bodies and associations are monopolistic in nature and cover a wide range of sectors. The fees they charge are not all reasonable, which has undercut fair competition in the market. Such problems must be promptly addressed,” Premier Li said.