Recently, during a State Council executive meeting, it was decided to fully practice list-based management for all items requiring administrative approval, by adopting the “List of Items Requiring Administrative Approval Set by Laws, Administrative Regulations and the State Council (2022 edition).” The meeting also required that all provinces, cities and counties should compile their own lists of items by the end of this year, covering all items requiring administrative regulations. Such lists have been available in previous years, but this meeting highlighted their “full practice” and declared the key issue of rescinding any “disguised” approvals. In particular, the meeting stated that “no administrative approval should be required or implemented against the law over any item outside the lists,” in an effort to tackle the “lists beyond lists,” a thorny issue in the reform of administrative approval. The central government has identified the problem and made a targeted solution, making the reform worth looking forward to.
The administrative approval reform is an essential measure to improve the business environment, stimulate market vitality and build a national unified market. It also helps define the boundary between the market and the government. This move pushes for further administrative approval reform, despite some tricky issues lying ahead. The top priority is to ensure that the reform is carried out in a sensible manner by all authorities at all levels according to the central government’s unified arrangements, allowing all items for administrative approval to be included in lists for management. This does not mean the end of administrative approval reform, but rather puts forward higher requirements for its continuation. It should be noted that at present, with the increasing downward pressure on the economy, the repeated rebound of the pandemic, and the imbalance between financial revenue and expenditure, eliminating administrative approval in disguised forms may more difficult than usual.
The administrative approval reform is an important part of the administrative reform. Since the establishment of the “power list system” proposed by the 3rd Plenary session of the 18th Communist Party of China (CPC) Central Committee, the development of the administrative approval lists has been gradually accelerated. From the central government to local governments, the administrative approval for a large number of items has devolved or been canceled. However, the situation in which the government controls too much has not seen any significant changes. Quantity and quality are indicators that can be used to evaluate the effectiveness of the administrative approval reform. The main market players and the public have the most say on whether the administrative approval is reasonable or not.
Excessive administrative approval not only reduces social efficiency, but may also lead to corruption. Administrative approval is closely related to the departmental interests of authorities, localities and even officials, and one official seal or signature can be enough to make people find alternative ways, including flattery or bribes. Law enforcement inspection found that in some places, while canceling administrative approval items, illegal approval mechanisms were set up. Many units that no longer have the authority to perform administrative approval still continue to do so.
A prominent problem is that nonadministrative approval items have existed for a long time and they still have an impact today. Article 3 of the Administrative Permission Law, which came into effect in July 2004, stipulates other approvals inadaptable to the Law. In August 2004, the General Office of the State Council issued a circular retaining 211 items beyond the administrative approval. The parallel implementation of administrative approval and nonadministrative approval was a measure that has to be taken because of the conditions at that time, but the expansion of the latter will undoubtedly weaken efforts to standardize administrative approval. In recent years, the administrative system reform has regarded cleaning up and standardizing nonadministrative approval as a key task, and the concept of “nonadministrative approval” was not withdrawn until 2015 when the State Council decided to cancel the items requiring nonadministrative approval. However, the fact is that it has not disappeared. Instead, it has taken a new shape in the form of a “list of other administrative powers.” Obviously, the regulation of these kinds of cockroach-like disguised approvals poses the most serious challenge to the comprehensive implementation of list-based management for all items requiring administrative approval.
To clean up and standardize administrative approval and its disguised forms, we must rely more on the rule of law and give full play to the role of laws and regulations, such as the Administrative Permission Law. We must also admit that the law has not played its due role yet. There are no doubts that it would be faster to boost the reform by policy documents, but this method is prone to defects in legitimacy and rationality, and could encounter resistance in implementation. Legalizing the administrative approval lists involves all aspects, from list compilation to the specific implementation, as well as the subsequent dynamic adjustment. Both the legitimacy of the entity and the openness of the procedure should be law-based and withstand the review of the law. Only in this way can the lists be adjusted dynamically. With the emergence of the new economy and new business types, administrative approval tends to face considerable controversy, as in the case of online ride-hailing services. When it comes to the interests of authorities and localities, law-based management is the most legitimate and effective way to regulate power, clear disputes and weigh the demands of all parties.
Strengthening supervision and accountability is an important part of fully practicing list-based management for all items requiring administrative approval. On the contrary, formalized supervision and accountability lead to the long-term existence of disguised administrative approval. According to the Administrative Permission Law, administrative bodies at higher levels shall enhance the supervision and inspection of the implementation of administrative approval by administrative bodies at lower levels and correct their illegal acts in a timely manner. However, due to the lack of a detailed system design, the functions of supervision and accountability have been seriously weakened. The State Council executive meeting stressed that disguised approval requirements under different names should be overhauled and that the people responsible will be held to account. Where administrative approval is established in a normative document not in compliance with legal requirements, according to the provisions of the Administrative Permission Law, “The relevant body should order the body that established the administrative approval to correct or revoke it in accordance with the law.” However, facing cumbersome normative documents, it remains unresolved how to clearly define relevant bodies and how to find ways to correct the issue.
The essence of the lists of administrative approval items is to restrain power in an institutional cage. Administrative approval is the most effective touchstone to test whether power is exercised for the public good or for private interest. Fully practicing list-based management for all items requiring administrative approval is a difficult and neverending task. Governments at all levels should urgently advance this reform and must be made aware that nonstandard administrative approval is eroding economic and social vitality. The lists of administrative approval items are an important part of administrative reform. If these lists are well formulated and implemented, China will take a great step toward its goal of building itself into a country governed by the rule of law.
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