For months Beijing’s focus has been on one big idea: overhauling the way the government operates to pave the way for structural changes to the economy. It involves pushing the authorities to the market sidelines so that buyers and sellers can operate more efficiently and unleash more economic potential.
To that end, the central government has scrapped or decentralized responsibility for hundreds of administrative approval procedures, Premier Li Keqiang told a conference in Beijing late last month. But it is not enough for Beijing to make these decisions — much of the success of these changes will rest on how well local governments turn the spirit of the reform into action.
Local implementation of the reform drive will be the first major domestic test of President Xi Jinping and Li’s administration because the changes will affect the entrenched interests of beneficiaries at all levels.
The reforms are a key tenet of the Xi-Li agenda and are expected to be at the top of the agenda when the Communist Party’s Central Committee meets later this week for a direction-setting policy meeting.
Local governments are crucial to the process because they are the last mile connecting the central government to the general public and business. As part of the push to create a more business-friendly environment, they’ve been told to cut the number of steps in administrative approvals, reduce fees and fines, improve general public services and “uphold social justice” in areas such as education, health and care for the elderly. They also have help the central government open communication channels with business and the public.
At the same time, the local authorities will be taking on more direct responsibility to approve projects, duties that must be exercised with the broader community in mind and not the administration’s own interests. They must be referees and not players in the market, relinquishing their role in business activities such as hosting business exhibition to tapping new investment.
Their primary responsibilities will be to actively regulate areas such as food safety and counterfeit products, and to ensure a fair and competitive market environment.
But, many officials or business executives believe that offering kickbacks during the tender or bidding process is still an essential condition for getting deals done. And this old-style mindset may prevent the reforms from penetrating the surface.
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