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China's to target "red-hatted" intermediaries

Xinhua, February 27, 2015 Adjust font size:

China will launch new measures to regulate "red-hatted" intermediary services to trim administrative approvals and prevent corruption.

Wu Zhilun of the State Council office of administrative review and approval reform, told a press briefing on Friday that the measures are expected "in one or two months".

"Red-hatted" intermediaries are businesses with official associations. Some are former government departments, others are administered or backed by the government and some provide positions for retired senior officials.

Despite changes to administrative approval, in some cases applicants still have to go through these intermediaries to secure evaluation, authentication or review reports.

"The underlying problem is the link between these businesses and the powers that be," Wu said. "The solution is cutting these links or demanding transparency."

According to a document distributed at Friday's briefing, central government departments controlled 1,526 approval items in 2013. About a third of them have since been canceled or delegated to lower agencies. A total of 205 were abolished by the end of 2014 and the another 248 will be annulled this year.

Streamlining administrative approval has expedited innovation and entrepreneurship, boosted the job market, added momentum to economic and social development and curbed corruption, the document claimed. Endi