Full text of Chinese Premier's teleconference address on streamlining administration procedures, cutting red tape (5)

III. Strive for dynamic and orderly market and society by innovating and strengthening governance

Deepening administrative reform and transforming government functions require not only the removal and delegating of powers, but also improvement and strengthening of governance, with greater government efficiency and stronger government capacity for comprehensively performing duties in accordance with law, so as to ensure both dynamism and order in the market and society, and deliver sustained and healthy economic growth and just and equitable society.

The pressing task now is to strengthen market regulation, and create a level playing field for market entities of various types. Currently, China's market economy is far from well-regulated. A large number of new market players have emerged after the reform of the business system. Should market regulation fall short, market disorder could intensify, and the distorted effect of the "bad money driving out the good" would get amplified, and the development of honest and the new market players would be adversely affected. I was told in my local field trips by many, including business people from Taiwan and foreign countries, that companies alone can not resolve such market irregularities as IPR infringements, cheating, swindling and counterfeiting. If the government gets them under control, companies would be relieved of their "pain in the heart". Therefore, after significantly reducing the number of review and approval items, the government should get to the ongoing and ex-post oversight of the market. This represents a major shift of government management style which is harder and more challenging. Governments at all levels, as well as their employees, should adapt themselves to such a shift and earnestly perform their duties of governance.

We need to improve the supervision approach to place more emphasis on the rule of law, fairness and accountability. The current practice of market supervision entails inspection of too many kinds without clearly defined rules, adding burdens to enterprises and creating room for rent seeking. On the other hand, market behaviors that should be subject to supervision by the government are left in benign neglect. The right approach to supervision requires both strictness and simplicity. The government should minimize intervention in people's lives and put in place a sound legal framework and proper and effective rules, procedures and standards for market supervision and publicize them fully so that market players will know where the line is drawn and carefully observe it. By so doing, the discretionary power of regulators will be slashed. Equally important, the government must carry out supervision in accordance with the law, maintain and safeguard the market order for fair competition. To use a sports metaphor, the government should be a good "referee" - leaving those well-behaved players alone while giving a timely yellow-card warning for minor fouls or a prompt red card for serious foul play. Needless to say, a referee should perform his duty faithfully and enforce the rules in a fair and just manner instead of being negligent or engaging in match-fixing. Regulators must be subject to supervision as well. Relevant information should be made public and a well-defined accountability system for supervision must be enforced.

We need to innovate supervision mechanisms and explore new ways to make supervision more effective. After active experiment over the past two years, local governments have gathered plenty of good experience and practices. Continuous efforts must be made to advance innovation in supervision. First, we need to put in place an integrated system for supervision and law enforcement. We should push ahead the building of a unified supervision platform that covers the entire scope of supervision by all government departments involved. Meanwhile, we need to consolidate administrative law enforcement teams to conduct cross-department and cross-sector law enforcement. The responsibilities of different law enforcement agencies can be merged into one to form synergy in supervision and law enforcement and avoid either overlapping responsibilities or blank spot. The result of supervision and law enforcement should be made public and put on record. After all, the most effective way to deal with unfair supervision and law enforcement is to expose them in the sun light. Second, we will carry out more ad hoc inspections. In some places and sectors, enterprises and regulators involved in inspections are now randomly selected through separate lotteries conducted on the same platform. We will popularize such practices across the country as they both increase pressure on the enterprises and narrow the space for rent seeking. Third, we will advance "smart" supervision. We should actively employ big data, cloud computing, the Internet of Things and other information technology to explore an "Internet Plus supervision" model. We should speed up information sharing and connectivity among departments at different levels to remove "isolated islands of information", so to speak. We will put in place a unified social credit system, an information disclosure and credit filing system, and an integrated punishment and black list mechanism so that one dishonest behavior will result in restrictions at every turn. Fourth, we need to strengthen public supervision. We need to have unimpeded channels for public complaints and tip-offs. We should give sufficient incentives to whistle-blowers and keep their identity confidential. Enterprises should bear the primary responsibility in the mutual supervision mechanism that can trace problems to the source. Industry self-regulation and peer review should be strengthened. Media scrutiny should be encouraged. All these efforts will help weave a tight net of supervision where nothing can escape public attention. (mo