Fees will be cut to spark busi­nesses

China Daily (Canada) - - TOP NEWS - By HUYONGQI huyongqi@chi­nadaily.com.cn

State Coun­cil says bet­ter con­trols to help elim­i­nate im­proper charges

Fi­nan­cial bur­dens for en­ter­prises in China will be fur­ther re­duced with the gov­ern­ment’s de­ci­sion to tighten reg­u­la­tion to elim­i­nate fees im­prop­erly levied on busi­nesses, promis­ing eas­ier op­er­at­ing con­di­tions and ex­tra room for in­no­va­tion in the year ahead.

This was one of four de­ci­sions made at a State Coun­cil ex­ec­u­tive meet­ing on Wed­nes­day, presided over by PremierLiKe­qiang. De­ci­sions also were made to help the con­struc­tion in­dus­try with up­grades, pro­mote high-qual­ity farm­lan­dandim­provepes­ti­cide man­age­ment.

The State Coun­cil, of­ten called China’s Cab­i­net, will work to fur­ther re­duce busi­ness fees and charges na­tion­wide through bet­ter su­per­vi­sion, of­fi­cials said. This will in­clude long-term mea­sures to re­duce ad­min­is­tra­tive costs for en­ter­prises, in ad­di­tion to cut­ting out im­prop­erly charged fees, ac­cord­ing to a state­ment re­leased af­ter the meet­ing.

Li has re­peat­edly men­tioned that gov­ern­ment needs to de­vise ef­fec­tive ways to en­sure the long-last­ing re­duc­tion of ad­min­is­tra­tive costs for busi­nesses.

It was de­cided at Wed­nes­day’s meet­ing that au­dit­ing and in­spec­tions will be used to re­duce im­proper fees and charges. It also was de­cided that in­dus­try as­so­ci­a­tions will be strictly pro­hib­ited from forc­ing en­ter­prises to join and pay fees. Also, other agen­cies will not be al­lowed to charge fees based on their con­nec­tions with gov­ern­men­tal de­part­ments.

Since 2013, gov­ern­ments at all lev­els have been told to find ways to re­duce ex­tra charges on en­ter­prises through lim­its on gov­ern­ment­funds and ad­min­is­tra­tive ex­penses.

The cen­tral gov­ern­ment has re­moved 496 fees, while lo­cal gov­ern­ments can­celed more than 600 fees, the state­ment said. Ad­min­is­tra­tive fees and the pro­por­tion of social in­sur­ance paid by en­ter­prises also have been grad­u­ally re­duced since 2015. Of­fi­cials say they hope to con­tinue to en­cour­age the ex­pan­sion of busi­nesses, as seen in the bet­ter than ex­pected re­sult of 51.3 in­Jan­uary’s pur­chas­ing man­agers in­dex. The num­ber is a mea­sure of the health of man­u­fac­tur­ing, and a PMI greater than 50 rep­re­sents ex­pan­sion.

Li and the cen­tral gov­ern­ment have been pro­mot­ing busi­ness star­tups and en­trepreneur­ship across the coun­try. The State Ad­min­is­tra­tion for In­dus­try and Com­merce said in Jan­uary that last year saw­morethan16 mil­lion­new busi­ness en­ti­ties emerge, an in­crease of 11.6 per­cent, with 15,100 new busi­nesses reg­is­tered each day.

Cut­ting im­proper fees is in line with the ad­min­is­tra­tive stream­lin­ing the cen­tral gov­ern­ment has pro­moted, said ZhangChunx­iao, aneco­nomics re­searcher at the Chi­nese Academy of Gov­er­nance.

Au­dit­ing and in­spec­tions are a must to en­sure com­pli­ance, which will cut busi­ness costs and in turn drive in­no­va­tion in tech­nolo­gies and busi­ness mod­els, Zhang said.

“Taxation is not high in China, but these fees are true bur­dens for en­ter­prises that have to pay ex­tra for a num­ber of ap­proval pro­cesses. By re­duc­ing these fees, mar­ket po­ten­tial can be un­leashed and en­ter­prises em­pow­ered to in­no­vate and up­grade, which is cru­cial for sup­ply­side struc­tural re­form,” Zhang added.

Zhang Yue con­trib­uted to the story.

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