Press Release for March 26, 2018 Media Briefing by Shanghai Municipal Government
March 28, 2018
The Information Office of Shanghai Municipality held a press conference today (March 26) during which Ma Chunlei, deputy secretary- general of Shanghai Municipality and director of the Shanghai Municipal Development & Reform Commission, gave an introduction about the city’s latest progress in its efforts to further improve business environment. Chen Meng, deputy head of the Shanghai High People’s Court, Zhu Ming, deputy director of the Shanghai Municipal Development & Reform Commission, Wu Jincheng, deputy director of the Shanghai Economic and Information Technology Commission, Pei Xiao, deputy director of the Shanghai Housing and Urban & Rural Development Commission, Ceng Fukang, deputy director of the Shanghai Planning and Land Resource Administration, Ruan Li, deputy director of the Shanghai Industry and Commerce Administration, Luo Peixin, deputy head of the Legal Affairs Office of Shanghai Municipality, Wu Wei, deputy director of the Shanghai Municipal Office for Port Service and Jiang Xutao, chief economist of the Shanghai Taxation Bureau, were all present at the conference to take questions from the media.
As China’s largest economic hub, Shanghai has benefitted from a good business environment for its development. The Municipal Party Committee and the Municipal government have paid high attention to the fostering of a friendly business environment and considered it a top priority to boost the next phase development of the city’s reform and opening up. At the end of last year, the Municipal Party Committee and the Municipal government jointly released the <Action plans on Shanghai’s fostering of a better business environment to accelerate the construction of a new and open economic mechanism>, with a purpose to build Shanghai into a city that offers most convenience for trade and investment, highest efficiency in administrative process, most standardized service and management as well as optimized rule of law system. So far, the city has already made following progress in improving its business environment.
I Progress in Shanghai’s action plans to foster a better business environment
An international metropolis, Shanghai aims to build itself into a global city with excellence as required by the central government. Shanghai has achieved excellent results in many globally recognized evaluation indexes which include a 9th ranking in Globalization and World Cities (GaWC), a 6th position in Global Financial Centers Index (GFCI), a 19th ranking in A.T. Kearney’s Global Cities, etc.
The World Bank’s “Doing Business” report is an evaluation criteria with global influence and Shanghai and Beijing are the two sample cities picked by the World Bank to review the country’s business environment. In December 2017, a team of experts from the World Bank’s “Doing Business” report project came to Shanghai and held talks with various government departments covering key indexes including cross-border trade, real estate registration, corporate set-up, protection of minority investors and approval of construction permission. They also made site visits to get a more thorough idea about the real business environment in Shanghai. In order to further exchange information and experience, the Ministry of Finance and the World Bank will jointly hold a high-level seminar in Shanghai on “International experience on business environment improvement and its enlightment for China”.
Shanghai’s action plan for business environment reforms mainly focuses on the experience of the top-ranked advanced economies in the World Bank’s business environment report. The city will further strengthen reforms in specialized areas. Shanghai will insist on opening the door wider to business environment reform and fully take the suggestions from the World Bank last year to optimize China’s business environment policy. Shanghai has taken 24 among the total 28 short-term advices from the World Bank in newly-introduced reform measures. The city tries best to get the support of national ministries and commissions. Eight reform approaches have been implemented first in Shanghai, such as the first to implement the construction funding mechanism and further simplify import and export declaration documents. In addition, Shanghai also learned advanced experiences from other provinces such as approval without meeting and simplification of procedures. Related departments of the government have extensively listened to enterprises’ opinions through various channels such as research and visits.
Combining with current situation of the city, six indicators have been issued for the business registration, application for electricity, construction permits, property registration, cross-border trade and tax payment. Shanghai issued special policies and supporting documents and developed 20 new service systems. Among them, 14 systems have been launched and the other 6 will go live by the end of this month. The results show that the processing time of these services is cut in half in average, and the number of procedures declines by nearly 40 percent after the reforms. In particular:
To set up corporate targets, the service platform system for enterprise registration will be launched at the end of March. Business licenses, public security official records and tax payment will be accepted in one window and will be automatically distributed and processed at the backstage. The window also provides services such as bank account opening, self-service social insurance service and employment service. After the reform, For instance, it will take only 6 days to apply for the permits, comparing with the former 22 days, and the procedures will be reduced from 7 to 5.
User’s application for power access will be accepted by the power grid enterprise, completely changing the situation in which company must pay the money and go through the formalities. The procedures will be reduced from 5 to 2. It will take an average of no more than 25 working days compared with the original 145 days. At the same time, the cost of external construction projects for low-voltage non-resident users will be cancelled and the cost of obtaining access to power for small and micro-enterprises will be free charged from the original 200,000 yuan.
To apply for construction permits, Shanghai will improve classification and approval modes, improve approval process, explore multiple evaluations and integration modes and implement other reforms. The approval time for obtaining the construction permits will be shortened. It will take no more than 15 days for industrial projects, 35 days for small projects and 48 working days for other social projects.
In terms of real estate registration, Shanghai will implement a full service and connected platform. All application procedures for registration of real estate transactions will be accepted one time through the window. It will take one day for six issues such as mortgages and easements compared with the original 28 days and 5 working days for other matters.
Cross-border trade. Carry out the port work in parallel, synchronously operate the customs declaration and commodity inspection and the logistics work, and promote to cut one-third of the time for the imported containers to be picked up from the ports. Registration time will also be reduced. The certificate of origin can be applied online and printed independently within 4 hours, and the application for the import license of mechanical and electrical products which should be approved by local commerce departments will be completed within a day. Meanwhile, Shanghai will unveil the charges of the port work and processing procedures including categories, items and levels, and deal with and regulate the ports' unreasonable charging problem which is a pressing concern of companies.
Tax payment. Shanghai will issue a list of matters on tax payment, and people can pay taxes for these items on this list with going offline at most one time. The city will explore the pre-fill declaration, enable people to revise the declaration on line, and develop pluralistic ways to pay tax. With these efforts, the time of tax payment is expected to reduce by 20 percent. As the Change from Business Tax to Value-Added Tax and the stamp duty can be declared on the Internet, the number of times of tax payments can be cut by 2.
These specific reform measures have all formed regulatory documents which have been published on the government's web portal www.shanghai.gov.cn and official websites of authorities. Competent authorities also posted the procedures, guides, contacts for consulting services and the supervisory hotlines on their websites and service windows.
The specific action plan learns from the international experience offered by the World Bank and make great efforts to put it into practice instead of making slight changes. It is not limited to specific industries or sectors, but takes companies as a central aspect to bring a systematic process reengineering and a transformation of government service philosophy which take convenience as a goal. For instance, the reform on approvals for construction permits covers all social investment programs. The government opens a service platform which integrates all the processes for companies to open for business, provides convenient services for both domestic and foreign-funded companies which enables them to complete the applications with the same processes and time. Another example is that not only companies, but citizens can also complete property registration with going offline only one time after the reforms.
II Progresses of the business environment reforms throughout the city
The city's business environment promotion conference was held in December 2017, and action has been taken across the city focusing on difficulties and obstacles in companies' investments in Shanghai. The city systematically implements some reform measures targeting in specific issues to launch the revolutionary process reengineering, and the reforms achieve notable results. By now, districts have separately released district-level implementation opinions or action plans in line with their various conditions. They have launched reform measures in improving business environment to meet the demands of companies. For instance, Pudong New District raised a series of measures of high standard such as developing the Free Trade Zone rapidly. Municipal authorities and offices have published 16 regulatory documents or work plans, and further reforms are being schemed and pushed forward.
First is on facilitation of trade and investment. The State Council has approved 47 items in the reform plan of “separating administrative approvals from business certificates” in 10 areas including healthcare, investment, construction and transportation. Shanghai will further enhance the reform with the principle of “cutting red tape as more as possible” on city-level or district-level administrative approvals. Shanghai will also make the rule on the standardization of administrative approvals notice one of this year’s government legislation. Shanghai will soon publish its 2017 official investment guide. Compared with the current copy, the city-level approvals will be moved to district-level approvals for another 4 business categories and district-level registration for 10 genres of projects. On enterprise registration, Shanghai has launched online registration services covering all businesses, and run pilot programs of “multiple sites with one certificate” in Pudong New Area and Changning District. Logistics information from the ports has been offered in the “one stop” service for international trade, creating a complete service chain for inquiry and function over “customs clearance + logistics.”
Second is on government services. Shanghai has established a joint meeting mechanism to serve enterprises, while at the beginning of this year, the city launched the cloud service for enterprises to offer policy consultancy for businesses at all growth stages. Based on hotlines "12345" and "Please find fault", Shanghai also established a unified government platform to address inquiry, complaint and advice from businesses and citizens to realize "one call" response. Shanghai just approved a work plan to accelerate the growth of a smarter government to manage unified administrative services in data collection, data sharing, and data application, as well as in coordinated services of receiving, addressing and managing inquiries. Shanghai plans to realize online services for 90 percent of city-level and district-level approvals within this year, or requiring businesses only one visit at the most.
Third is on the progress of Shanghai's construction of "Four Brands." To lift Shanghai's profile in services, manufacturing, shopping and culture (known as Four Brands) is an important move in optimizing the city's business environment, and they interact with each other. The focus is brand-building, while the expectation is optimization. At the moment, Shanghai has made an action plan for the campaign of building Four Brands, and will implement it soon to push forward the improvement of the city's business environment.
There's no end for the improvement of business environment. The current move is just one step, which needs further facilitation and optimization. In next steps, Shanghai will beef up efforts, taking the opportunity of World Bank evaluation method to deepen reforms, which are expected to bring more satisfaction to enterprises and make Shanghai a world’s advanced city on business environment.