Further Effectively Conducting the Work concerning Private Investment

• Document Number：Plain Telegram No. 12 [2016] of the General Office of the State Council
• Area of Law： Reform and Opening-up
• Level of Authority： Regulatory Documents of the State Council
• Date issued：07-01-2016
• Effective Date：07-01-2016
• Status： Effective
• Issuing Authority： General Office of the State Council

Notice of the General Office of the State Council on Further Effectively Conducting the Work concerning Private Investment
(Plain Telegram No. 12 [2016] of the General Office of the State Council)
The people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government; all ministries and commissions of the State Council; and all institutions directly under the State Council:
The Central Committee of the Communist Party of China (CPC) and the State Council have attached great importance to the promotion of the sound development of the non-public economy and private investment. General Secretary Xi Jinping stressed that the public economy and non-public economy are both the important constituent parts of the socialist market economy, and are both the important foundation of China's social and economic development. The development of non-public economy shall be unswervingly encouraged, supported and guided, and it shall be ensured that all economies of various ownership systems lawfully and equally use factors of production, fairly participate in market competition, and enjoy the equal protection of the law. Premier Li Keqiang said that the enterprises' status as the market participants shall be respected and maintained, the reform shall be constantly deepened, the implementation of policies shall be propelled for effect, market expectation shall be stabilized, private investment shall be further motivated, and the potentials and innovation vigor of private investment shall be stimulated. Given the recent slowdown in the growth of private investment, for the purpose of promoting the sound development of private investment, the State Council arranged and conducted a special supervision and a third-party evaluation and survey to promote the implementation of the policies on private investment. On June 22, the executive meeting of the State Council heard the report on the special supervision and the third-party evaluation and survey, and made further requirement for the effective conduct of the work concerning private investment. For the purpose of implementing the spirit of the important instructions of the leaders of the CPC Central Committee and the State Council, and the arrangement of the executive meeting of the State Council, with the approval of the State Council, you are hereby notified of the relevant matters as follows:
I. Fully recognizing the important meaning in the promotion of the sound development of private investment
Over recent years, the non-public economy has improved constantly in strength and has become an important foundation to stabilize China's economy. The non-public economy created roughly 60% of gross domestic product, and roughly 80% jobs, and private investment has accounted for more than 60% of the total investment in fixed assets. The promotion of the sound development of private investment is beneficial in the short term and in the long term, significant to stabilize growth and maintain employment, and an important content to promote the structural reform, especially the structural reform of the supply side.
The people's governments of all provinces (autonomous regions and municipalities directly under the Central Government), and all relevant departments shall comprehensively implement the spirit of the 18th CPC National Congress and the Second, Third, Fourth and Fifth Plenary Session of the 18th CPC Central Committee, firmly develop new development concepts, conscientiously carry out the arrangements of the Central Economic Work Conference and the Government Work Report, according to the requirement of the executive meeting of the State Council, promote the implementation of the Guiding Opinions of the State Council on Innovating in the Investment and Financing Mechanisms for the Key Fields and Encouraging Social Investment (No. 60 [2014], State Council), the Several Opinions of the State Council on Encouraging and Guiding the Healthy Development of Private Investment (No. 13 [2010], State Council), Several Opinions of the State Council on Encouraging, Supporting and Guiding the Development of Individual and Private Economy and Other Non-Public Sectors of the Economy (No. 3 [2005], State Council), and all policies, promote the stabilization and upswing of private investment, and better make use of the role of private investment as the major force.
II. Conscientiously ensuring the implementation of the rectification about such problems as are discovered in supervision, evaluation and survey.
It is discovered during the special supervision and the third-party evaluation and survey to promote the implementation of the policies on private investment that in some regions and some fields, there exist prominent problems, such as non-implementation of policies and measures, ineffective transformation of governmental functions, difficulties and high expenses for private enterprise in financing and enjoying the same "national treatment," and heavy cost burden on enterprises. The people's governments of all provinces (autonomous regions and municipalities directly under the Central Government) and all relevant departments shall "sit in the right seat," check items one by one, make timely rectification, draw inferences about other cases from one instance, research and improve relevant supporting policies and detailed rules for the implementation, effectively strengthen and improve the whole work concerning the promotion of private investment in their respective regions, departments and systems, ensure the achievement of actual effect, make a report prior to August 15 on the stage results of rectification and next priorities of rectification to the General Office of the State Council, and make a copy thereof to the National Development and Reform Commission (NDRC).
The NDRC shall, in conjunction with relevant departments, establish a supervision and guidance team, and organize prioritized supervision and guidance as of the middle of July for the provinces (autonomous regions and municipalities directly under the Central Government) where the private investment is huge, the growth thereof slows down relatively fast on a year-on-year basis, and the recent growth of private investment is lagged behind.
III. Continuously deepening the reform of simplification of administrative procedures, combination of decentralization and control, and optimization of services
Since the establishment, this Administration has deemed the simplification of administrative procedures as "an offensive move," constantly promote the transformation of governmental functions, and stimulate the vigor of enterprises. However, some private enterprises reported that in some regions, there still exist problems, such as importance attached to approval, little attention paid to supervision, and few services, relevant administrative approval chain has not been shortened significantly, the efficiency of approval has not been improved significantly, and "dual random, one disclosure" has not been comprehensively promoted, leading to relatively overlapped examination and absence of government services. The people's governments of all provinces (autonomous regions and municipalities directly under the Central Government) and all relevant departments shall further clear administrative approval matters, break down all types of customs passes in a timely manner, firmly cancel administrative approval matters which should have been canceled, and delegate powers which should have been delegated to markets as soon as possible to markets. The "dual random, one disclosure" regulatory mode shall be comprehensively promoted. The establishment of a transparent and efficient interim and ex-post supervision system with well-defined powers and responsibilities shall be accelerated. Weak parts shall be focused on to comprehensively improve government service ability and level.
In the latter half of this year, the Approval Reform Office of the State Council shall, in conjunction with relevant departments, conduct special inspection over the implementation of the reform of "decentralization, control, and service."
IV. Making efforts to create a fairly competitive market environment without discrimination
The documents of the State Council with regard to the promotion of the sound development of the non-public economy and private investment have specified that all market participants shall be governed by the principle of fair access and a series of policies and measures. However, private enterprises universally reported that, in the aspects of market access conditions, market elements allocation, government administration services, etc., it is still hard for them to enjoy the same "national treatment" as state-owned enterprises. The people's governments of all provinces (autonomous regions and municipalities directly under the Central Government) and all relevant departments shall, by reference to the state policies and requirements, by adhering to no discrimination, establish a market access negative list system without delay, further ease the access to the fields of civilian airports, basic telecommunication operation, oil gas exploration and development, etc., eliminate all types of visible and invisible thresholds in the key fields of infrastructure, public utilities, etc., issue effective measures in the livelihood fields of medical care, support for the elderly, education, etc., and promote fair competition.
The people's governments of all provinces (autonomous regions and municipalities directly under the Central Government) shall conduct thorough examination by themselves of the policies issued by them, firmly cancel additional conditions and discriminatory articles separately established on private capital, accelerate the improvement of fair, open and transparent market rules, and practically create an investment environment featuring equal rights, equal opportunities and equal rules. A report on the self examination shall be made together prior to August 15 to the General Office of the State Council, and a copy thereof shall be submitted to the NDRC.
V. Vigorously easing the problems of difficulties and high expenses in financing.
Over recent years, the State Council has issued in a row a series of measures to ease problems of difficulties and high expenses for micro, small and medium-sized enterprises in financing, and has achieved positive effect. However, difficulties and high expenses in financing are still one of the prominent problems private enterprises largely reported. Private enterprises undergo many procedures, spend much and encounter huge difficulties in the application for loans, and some banks frequently spare, delay, reduce or rescind loans. The China Banking Regulatory Commission shall, in conjunction with relevant departments, conduct special inspection without delay, and urge banking financial institutions to strictly implement all policies and measures to support the development of the real economy. The "three no-lower-thans" shall be effectively carried out, namely, it shall be realized that the growth rate of small and micro business loans is no lower than the average growth rate of other various loans, the number of micro and small enterprises receiving loans is no lower than the figure over the same period of the last year, and the loan approval rate of micro and small enterprises is no lower than the figure over the same period of the last year; arbitrary imposition of enterprise-related fees by the banks shall be firmly investigated and dealt with; and financial institutions shall be guided in innovating on the financing modes suitable for micro, small and medium-sized enterprises by making use of big data and other new technologies, and large-scale commercial banks shall be promoted in expanding the services for the business of micro, small and medium-sized enterprises. The people's governments of all provinces (autonomous regions and municipalities directly under the Central Government) shall take active moves, vigorously promote and improve financial services, expand the financing channels for private enterprises, reduce financing cost, and advance the basic realization of full coverage of the provincial-level re-guarantee institutions in which government takes the lead.
The All-China Federation of Industry and Commerce, the Xinhua News Agency, etc. shall strengthen the survey and assessment of the financing situation of private enterprises, and report enterprises' appeals in a timely manner.
VI. Practically reducing the cost burden on enterprises
The purpose of the State Council to require relevant aspects to conduct the elimination of fees and establishment of taxes, the implementation of the pilot program of replacing business tax with value-added tax, and other work is to reduce the burden on enterprises and regulate the tax and fee systems. However, private enterprises reported that currently some measures are not effectively implemented, hindering them from fully enjoying the preferential policies issued by the state, and some regions collect much fee for all types of appraisals, and even still impose unjustifiable fees and arbitrary quotas.The people's governments of all provinces (autonomous regions and municipalities directly under the Central Government) and all relevant departments shall work more, and further ensure the implementation of the policies on accelerated depreciation of fixed assets, micro- and small-sized enterprise income tax incentives, reduction by stage of the rates of "five social insurance and one housing fund," etc. Comprehensive self inspection and concentrated clearance of enterprise-related fees shall be conducted without delay, and unreasonable fees and agency service parts shall be firmly canceled.
The Ministry of Finance shall, in conjunction with the NDRC and other relevant departments, conduct a special inspection of the clearance of enterprise-related fees without delay, promote the reduction of enterprise cost, and practically ease the burden on enterprises. The National Audit Administration shall follow the audit of enterprise-related fees as a key content of following audit in the implementation of policies.
The Ministry of Finance shall, in conjunction with relevant departments, arrange the special work to clear all types of debts the government owes to enterprises. The people's governments of all provinces (autonomous regions and municipalities directly under the Central Government) and all relevant departments shall, within the prescribed time, handle the problems of the default in the payment for project, goods procurement, refundable deposits, etc. to all types of enterprises, in accordance with laws and regulations.
VII. Enhancing the implementation of the primary responsibilities of the local governments and departments
The people's governments of all provinces (autonomous regions and municipalities directly under the Central Government) and all relevant departments shall practically perform the primary responsibilities, put on the important agenda the motivation of private investment and the promotion of the sound development of private investment, have major responsible persons take general responsibility and personally conduct coordination, have persons charged with special tasks specifically take charge of supervision and implementation, and effectively handle the prominent problems reported by private enterprises.
The people's governments of all provinces (autonomous regions and municipalities directly under the Central Government) and all relevant departments shall, in respect of government default, non-implementation of policies, and other problems, establish an accountability mechanism, and improve government credibility. According to the requirement for the establishment of "close" and "clean" government-business relationship, the government-business communication mechanism shall be improved to fully hear the opinions and suggestions of private enterprises and voluntarily improve work. Whoever retaliates an enterprise which reports problems based facts and truth shall be handled in accordance with laws and regulations, and the persons that take direct responsibilities and relevant leaders shall be held for accountability more strictly.
VIII. Strengthening policy interpretation and publicity
The people's governments of all provinces (autonomous regions and municipalities directly under the Central Government) and all relevant departments shall improve the information disclosure mechanism for policy issuance and interpretation, respond to social concern in a timely manner, and further create a good public opinion environment for private investment. Government information data shall be made more open, and effective channel to provide information services to private enterprises shall be kept unimpeded. Importance shall be attached to good practice and experiences in government administration services, and nonfeasance and abusive feasance cases shall be revealed. The promising prospective of China's economy shall be advocated voluntarily to release positive signals, boost confidence in development, and stabilize and improve market expectation
The people's governments of all provinces (autonomous regions and municipalities directly under the Central Government) and all relevant departments shall, according to the spirit of the this Notice, further effectively conduct the work relating to private investment, and make a timely report on important situation to the State Council.
General Office of the State Council
July 1, 2016