CRI听力:Pudong-- Easiest Place to Set up Business

There used to be a long list of pre-requisites that companies had to fulfill, before they could set up a business or expand an existing one. And now, 520 procedural items have been knocked-off, since reform began in 2003.

In other words, thanks to the bold steps to simplify business approval and cut government red tape, the average time needed for a go-ahead has been shortened from 22 to 8 days.

This has turned Pudong into the quickest launch pad for both domestic and multinational companies who want to tap into the lucrative Chinese market.

But it was a tough battle at the beginning as Jiang Hongjun explains. He directs the local Administrative Approval System Reform Center.

"Actually pushing forward reform was very hard at the beginning. If many administration approval items are to be cut-off, it means that some government institutions will become redundant and have to be cut as well. So it was really hard."

But it pays. Pudong New Area has been providing one-stop services to investors since 2010. Companies can now submit materials to only one designated department instead of going from door to door. This has greatly reduced administrative costs and improved efficiency.

Jiang Hongjun says innovation is vital for the reform process to succeed.

"For example, if the materials can be shared among different government departments, why asking companies to submit them over and over again? It's time consuming. We should make it more convenient."

Construction projects take up the largest proportion among all business applications. Zou Yaobin is the deputy general manager of the Shanghai Gezhouba Real Estate Group. He says quality inspection usually takes about three months.

"From our perspective, we hope the approval process won't affect our pace of construction. And the standards of inspection should be unified."

Zou Yaobin is happy that the reform measures introduced in Pudong are quite practical and effective.

"The number of procedures our companies have to follow and the number of departments we have to interact with have been greatly reduced. Before, we had to deal with many departments like the fire hazards department, lightning protection department to get our plans approved. Now we only have to communicate with professional companies since everything has been entrusted to them. This is definitely beneficial to enterprises."

The government now employs professional architectural and engineering firms to check project designs. Head of reform center Jiang Hongjun says this enables professional organizations to play a bigger role.

"We started a pilot program in 2002, to separate technical supervision from administration. Professional work should be done by professional organizations."

Foreign firms are also positive about the improvements of business atmosphere.

Wu Chuangao is an Operation Assistant of Toscotec, an Italian company specializing in paper-making machinery, located in Pudong.

"When the business needs to expand, we must get new government approvals, on safety concerns or more import and export licenses. It usually takes about three months to get customs approval. Sometimes we turn to an agency to deal with administrative approvals, which takes less than a month. It is pretty fast."

But the lack of transparency in government procedures and information asymmetry remains a problem. And Wu Chuangao calls for unified guidelines on new applications.

Experts say that the government should focus on scientific management during the reform process. Tan Lin is the head of the economics department at the All-China Federation of Industry and Commerce.

"Transforming the way the government function is at the heart of the reform process. The government has to make fundamental adjustments from administrative approval to market regulation and supervision. It should adapt to this change. New mechanism should be established. "

Founded in 1992, Shanghai Pudong New Area has been a pioneer in China's government reforms to create a more conducive environment for businesses and vitalize market forces. Such efforts were accelerated since the establishment of the Shanghai Pilot Free Trade Zone in September, 2013, covering Pudong and three other nearby districts.

The ongoing reform in Pudong is part of a nationwide reform process to streamline administrative powers, facilitate fair competition and fuel entrepreneurship. It also aims at easing the burden on private businesses and ensuring fair market access for foreign investors.

As the central government approved three more free trade zones in mid-December, some of the successful experiments in Shanghai are expected to be introduced in Tianjin, Guangdong and Fujian.

For investors, the message is clear: the government is determined to streamline its powers, to refrain from unnecessary meddling in market affairs and to do better in market regulation, service and supervision. For that end, Pudong, as a pioneer, has done a lot, and there's a lot more to be done.

For CRI, this is Cao Yuwei.