Date
24 October 2017
Inside A Logitech Production Facility

The Big Picture: SIMPLIFIED APPROVALS

Outlining its seriousness in reforming the administrative approval procedures and making things easier for investors, China’s State Council announced over the weekend that it will eliminate or transfer to local governments another 82 items from the central approval list. The cabinet will submit a draft of the proposed amendment of the law to the standing committee of the National People’s Congress.

For projects involving cross-province telecom infrastructure and value-added services, there will be no need to seek approvals from the Ministry of Industry and Information Technology (MIIT), according to a statement posted on the government website. The Ministry of Transport, meanwhile, will give up intervention in licenses for cross-province transportation of goods through roads and canals, said the statement, which was dated Jan. 28. In other initiatives, the Civil Aviation Administration will give up its right to approve projects that allow local airlines to serve overseas markets.

The cancellation of administrative approval procedures this time is more important than the steps taken in the previous rounds, as the current move involves many sectors that have high profitability, Song Shiming {宋世明}, a professor with the Chinese Academy of Governance, said in a separate statement on the government website.

The State Council’s latest move is aimed at making some government departments focus more on monitoring the operations of industry players, rather than putting too much attention on granting licenses, Song said. The cabinet also wants to open the telecom, transportation and aviation sectors to lure more private investment, he said.

The cabinet’s latest moves may face opposition from some vested interests, but the government should go ahead and implement the reforms, Song said. As there are only seven years left for major industries to adopt market-driven practices, the central government should eliminate many of the remaining approval procedures as early as possible, he said.

Private companies will benefit from the cancellation of approval procedures at the central government level but it doesn’t mean that they will be able to replace the state-owned players over the medium term, as there are many more rules that favor government-linked firms at the provincial level, market observers say. The central government should provide incentives to the provincial governments to create a friendly business environment for private capital.

China total social financing hits new high

China’s total social financing was a record 2.58 trillion yuan (US$425.192 billion) in January, up 1.33 trillion yuan from December and up 39.9 billion yuan from the previous year, 21st Century Business Herald reported Sunday, citing People’s Bank of China data. The January figure was the highest since data began. Renminbi loans rose by 1.32 trillion yuan, 246.9 billion yuan more than the growth in January last year. Entrusted loans increased by 396.5 billion yuan, up 190.4 billion yuan from the year-earlier period, the report said.

Tencent said to take 20% stake in restaurant review website

Internet giant Tencent Holdings Ltd. (00700.HK) is close to a US$400 million strategic stake purchase in restaurant review website Dianping.com, National Business Daily reported Monday. The deal, which values Dianping at US$2 billion, gives Tencent a 20 percent stake in the company, the report said, citing Bloomberg Businessweek. Tencent declined to comment on the report but said in media invitations that it is planning to make an announcement in Shanghai on Wednesday. The deal suggests the companies plan to develop an O2O (online-to-offline) business, the report said.

–Contact HKEJ at [email protected]

JP/RC

 

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