On 4 July, the State Council published the Cancellation and Decentralization of Administrative Approvals for the Fifth Batch of Projects Decision (Guo Fa [2010] No. 21), involving a total of 184 types of project, among which the requirement for approval will be cancelled for 113 types of project and approval will be decentralized to local governments for the remaining 71 types. Since the announcement of the Cancellation of Administrative Approvals for the First Batch of Projects Decision in November 2002, the State Council has abolished or amended approval requirements for four batches of projects involving nearly 2,000 types of project.
Ending approval requirements
The projects for which the approval requirement is to be abolished comprise: approval of mortgages over allocated state-owned land-use rights (by the Ministry of Land and Resources); approval of lists of equipment to be imported as capital contributions by foreign investors; approval of changes in the names of foreign investment enterprises, names of investors and legal addresses (by the Ministry of Commerce); approval of formation or termination of, and changes in, the PRC representative offices of foreign non-banking financial institutions as well as approval of the qualifications for holding the position of the chief representatives of such offices (by the China Banking Regulatory Commission); approval of the qualifications of securities firms for operating securities business and approval of changes in the addresses of the PRC representative offices of foreign securities institutions (by the China Securities Regulatory Commission); and approval of the formation of postal enterprises and their branches (by the State Postal Bureau).
Decentralizing approval authority
The 73 projects to be decentralized in the 2010 Decision are primarily related to:
- the approval of the formation of, and changes in, foreign investment enterprises, such as the approval of foreign-related M&A transactions of a value below a certain limit (except foreign investment enterprises subject to special regulations), and approval of the formation of and changes in foreign-invested venture capital and venture capital management enterprises below a certain limit; and
- approval of licences for the production of certain industrial products under the administrative catalogue, such as the issuance of licences for the production of pumps, and dangerous chemicals. Of these 73 projects, 69 will be delegated from the State Council or its ministries to their provincial branches.
Implementation and convergence
Since the cancellation or adjustment of approval requirements involves changes in the duties of certain administrative departments, and even a need to revise some legislation, whether the Decision is implemented correctly will be the key to whether this policy plays its expected role. A spokesperson from the State Council stressed that as a next step, the State Council must supervise relevant departments to make sure they have cleared up regulations and documents in relation to the approvals to be abolished; they have coordinated between the upper and lower levels of the same government department for the projects to be decentralized; and they have further identified and clarified the targets subject to approval, particulars of approval and approval criteria for the remaining projects that are still subject to administrative approval.
