Necessary transformation of the government's functions will require courage and determination to push forward reform

Besides positively affirming the progress achieved by reform and opening-up in the past three decades, Premier Li Keqiang has said the reform is now entering a crucial stage, which means there will be more difficulties ahead.

Li said administrative reform is not merely a reduction in the size of government, but reform that prioritizes the transformation of its functions. He has called for decentralizing power over the market, society and local authorities by decreasing government intervention.

The transformation of government functions is a guarantee for developing a market-oriented economy under rule of law. China's new leadership has made such a transformation a key issue, with reform of the administrative approval system as one of the necessary breakthroughs.

Chi Fulin, president of the China Institute for Development and Reform said there are too many administrative examinations and approvals in the current system, which is cumbersome and inefficient and leaves room for corruption. So greater efforts to further promote administrative reform are urgently needed.

Since 1998 the central government has constantly highlighted the need for administrative reform, with the consistent guideline of reducing or transferring administrative approval items to local government and promoting the initiatives of the market, enterprises, social organizations and individuals. The fundamental objective of administrative reform is to make the government a service provider, as a smaller government and bigger market will stimulate greater development vigor and creativity and help create more jobs.

However, reform of the administrative approval system still lags behind the real needs of social and economic development and people's expectations. In particular, some approval items are too complicated and some non-administrative approval items lack standardization and are randomly managed, while in the approval process there are usually multiple levels with overlapping functions in the administrative examinations. Moreover, there is no effective supervisory mechanism to prevent corruption.

There are several reasons for the above problems. First of all, an integrated and standardized administrative approval system has yet to be established and the current system places too many items and too much discretionary power in the administrative examination. Furthermore, the unbalanced internal supervision and inadequate social supervision mean the system is inefficient and there is space for corruption.

Also the Administrative License Law has some practical issues that need addressing. For one thing, the law cannot be fully carried out as some departments and officials have escaped from its control and kept those approval items relating to their own interests. For another, the policies in support of the law are still inadequate.

Measures need to be taken to solve these problems. First, China should keep carrying forward reform and innovation of the current administrative approval system. Instead of just focusing on the "number effect" by simply reducing the number of approval items, the government should push forward the core purpose of this reform by improving the relationship between government and market, so the market is finally allowed to allocate resources. Government functions should focus on creating a better development environment and maintaining fairness and justice in society.

Second, the central government should strengthen the supervision of examination and approval operations. More transparency is needed, so the system can consolidate the traditional supervision, such as by judicial office and legislative body, and develop new monitoring means. For example, the e-government platform can be used to facilitate the evaluation and approval process.

Third, the Administrative License Law should be effectively enforced and the legal quality of relevant administrative officials should be raised and supporting systems and policies to support the law, such as building the administrative licensing system with unified regulations, should be completed.

Finally, the information disclosure system and administrative compensation system should be updated and evaluation systems should be established for both before and after the administrative licensing.

After being piloted first in Shenzhen 15 years ago, administrative reform was rolled out nationwide in 2001, but these reforms were propelled by China's accession to the World Trade Organization. Whether further reform will succeed or not depends on whether the government has the courage and determination to push forward reform.

The author is a researcher with the Party School of the Central Committee of CPC.

(China Daily 05/16/2013 page8)