1st LD-Writethru-China Focus: China targets bureaucracy, corruption in administrative reviews

The central government has vowed to streamline administrative review procedures and address corruption in the intermediary service providers, third parties that companies often have to use to win approvals.

Chinese Premier Li Keqiang has repeatedly pledged more measures to boost economic growth, such as cutting redtape and redistribution of power. He even said reducing state involvement in the market was like "a brave man cutting off his own wrist".

At a press conference after the annual session of the National People's Congress in March, Li said one third of government approval items had been removed in the past two years. However, due to inconsistent intermediary services, the implementation of measures had been irregular.

In a circular issued on Friday, the State Council, China's cabinet, said that going through intermediary service providers takes up too much time, the process is prone to corruption, and the providers charge arbitrarily and are highly monopolistic, thus increasing the burden on enterprises and the general public, and disrupting market order.

For enterprises doing business in China, they sometimes have to hire third parties to help them pass administrative review processes that government departments tell them are necessary. These third parties often have government links.

The circular said that intermediary service providers, especially those related to State Council departments, must clearly specify what administrative reviews companies must face, and that they should not introduce reviews that are not required by law.

In a bid to break monopolies, it said any qualified entity should be allowed to go into business as an intermediary service provider, providing it does so according to existing laws. It is forbidden for government departments to set quotas on numbers of intermediary service providers, the circular stressed.

It also noted that "interest links", or favoring candidates with government connections when licensing intermediary service providers, will not be tolerated.

Industry associations and commercial chambers that provide intermediary services must be separated from the review and approval body, and government officials must not work part-time for intermediary service providers, the statement said.

As for the expensive and arbitrary charges, it said, intermediary services should be adjusted by the market and the scope of government pricing shall be minimized.

Other measures proposed by the circular included more public supervision and better transparency.

The circular did not set a deadline for such measures but it said the State Council's Office of Administrative Review and Approval System Reform will work with other departments on the implementation. Endi