Smaller govt spurs innovation

To further release market vitality and encourage innovation, the State Council, China's Cabinet, has ordered further delegation of central government's powers to lower levels of government, simplification of administrative registration and approval procedures and cancellation of some fees.

This is a further step toward promoting reform of the economic system. To simplify administrative procedures and tap the active roles of the market will help the government clarify its ties with the market, straighten out market rules and put itself in a correct position regarding economic activities. The transformation of government functions will emancipate creativity and boost production.

To lift unnecessary burdens from enterprises will mean the removal of obstacles that have previously hampered their innovation and hindered start-ups. The eradication of excessive administrative restraints and thresholds will reduce rent-seeking of power and thus activate enterprises' enthusiasm for innovation.

Over the past two years, the State Council has cancelled or delegated to lower-level governments a total of 537 administrative approval items and reduced by 76 percent central government examinations and approvals for investment projects, leading to a drastic increase in the number of newly established market players and jobs. From January to April, about 10,000 new enterprises were set up nationwide on a daily basis, creating 4.45 million jobs.

In the context of the complicated circumstances at home and abroad, China's economic growth faces downward pressures, but such pressures come side by side with huge potential and opportunities if efforts are made to encourage innovation. This requires governments at various levels to reduce their intervention and presence in economic activities.

The above is an abridgement of a Guangming Daily article published on Wednesday.

(China Daily 05/28/2015 page8)