Regulation on Optimizing the Business Environment

Regulation on Optimizing the Business Environment Order of the State Council of the People's Republic of China (No. 722) The Regulation on Optimizing the Business Environment as adopted at the 66th executive meeting of the State Council on October 8, 2019, is hereby issued and shall come into force on January 1, 2020. Premier: Li Keqiang October 22, 2019 Regulation on Optimizing the Business Environment Chapter I General Provisions Article 1 This Regulation is developed for the purposes of continually optimizing the business environment, continually emancipating and developing social productive forces, accelerating the building of a modern economic system, and promoting high-quality development. Article 2 For the purpose of this Regulation, “business environment” means the factors and conditions in the nature of systems and mechanisms related to enterprises and market participants in economic activities. Article 3 The state shall continue to deepen the reform of simplifying procedures, decentralizing powers, combining decentralization with appropriate control, and optimizing services, minimize the direct allocation of market resources by the government, minimize the direct intervention in market activities by the government, strengthen and regulate interim and ex-post regulation, focus on improving government service capacity and level, effectively reduce institutional transaction costs, better stimulate market vitality and social creativity, and enhance development impetus. People's governments at all levels and their departments shall adhere to open and transparent government, routinize public disclosure, make exceptions for non-disclosure, and comprehensively advance the public disclosure of decision-making, implementation, management, services, and results. Article 4 For optimizing the business environment, the principles of marketization, rule of law, and internationalization shall be adhered to, the needs of market participants shall be centered around, the profound transformation of government functions shall be the core, systems and mechanisms shall be innovated, coordination and interaction shall be strengthened, the protection by the rule of law shall be improved, and international advanced level shall be the benchmark so as to create a stable, fair, transparent, predictable, and sound environment for various market participants to invest in and prosper business. Article 5 The state shall accelerate the establishment of a unified and open modern market system for orderly competition, promote the free flow of various production factors in accordance with the law, and protect the fair participation of all market participants in market competition. Article 6 The state shall encourage, support, and guide the development of the non-public economy and stimulate the vitality and creativity of the non-public economy. The state shall further expand opening, vigorously promote foreign investment, and equally treat various market participants, including Chinese-funded enterprises and foreign-funded enterprises. Article 7 People's governments at all levels shall strengthen the organizational leadership of the work on optimizing the business environment, improve policies and measures to optimize the business environment, establish or improve the mechanisms related to coordinating the advancement and supervising the implementation of the work on optimizing the business environment, and promptly coordinate and resolve the major issues in optimizing the business environment. The relevant departments of people's governments at or above the county level shall, in accordance with the division of duties, effectively conduct work related to optimizing the business environment. A local people's government at or above the county level may designate a department to oversee the work on optimizing business environment according to the actual circumstances. The state shall encourage and support all regions and departments in vigorously exploring original and differentiated measures to optimize the business environment within the framework of the rule of law and based on the actual circumstances; and if an error or deviation arising in the exploration meets the prescribed conditions, liability may be exempted or mitigated. Article 8 The state shall establish and improve a business environment assessment system centering around the satisfaction of market participants and the public and cause business environment assessment to play a role in leading and supervising the optimization of the business environment. A business environment assessment shall neither affect the normal work of any region or department nor affect the normal production and operation activities of any market participant or aggravate the burden on the market participant. No entity may seek benefits by using a business environment assessment. Article 9 A market participant shall abide by the laws and regulations, observe social morality and business ethics, be honest and trustworthy, engage in fair competition, fulfill its statutory obligations in all aspects including safety, quality, protection of laborers' rights and interests, and protection of consumer rights and interests, and respect internationally accepted rules in international economic and trade activities. Chapter II Protection of Market Participants Article 10 The state shall adhere to the equality of rights, opportunities, and rules and ensure equal legal protection of economy under all types of ownership. Article 11 A market participant shall have operating autonomy according to the law. No entity or individual may intervene in any matter on which market participants may make independent decisions. Article 12 The state shall protect various market participants in their lawful and equal use of the various production factors and public service resources, such as funds, technology, human resources, and land use rights and other natural resources. The state's policy in support of development shall equally apply to all market participants. The government and its relevant departments shall, in arrangement of government grants, land supply, tax and fee reductions, qualification and license, development of standards, declaration of a project, professional title evaluation, human resources policies, etc., treat all market participants equally and lawfully and abstain from developing or implementing discriminatory policies and measures. Article 13 Bid tendering and government procurement shall be open, transparent, fair, and equitable, and a market participant under any type of ownership, from any region, shall be treated lawfully and equally, without being restricted or excluded by unreasonable conditions, product's place of origin, or otherwise. The relevant departments of the people's governments at all levels shall strengthen the regulation of bid tendering and government procurement and correct, investigate and punish the violations of laws and regulations. Article 14 The state shall protect the property rights and other lawful rights and interests of market participants and the personal and property safety of enterprise operators in accordance with the law. The imposition of administrative compulsory measures, such as seizure, freezing, and impoundment on the property of a market participant or the personal property of an enterprise operator in violation of the statutory authority, conditions and procedures shall be strictly prohibited; and if the law requires any of the aforesaid administrative compulsory measures to be imposed, they shall be imposed to the extent of necessity. The requirement that a market participant makes financial, material, or manpower contribution without authority of the laws and regulations shall be prohibited. A market participant has the right to deny any form of such contribution. Article 15 The state shall establish a punitive damages system for infringement of intellectual property rights, promote the establishment of a fast-track coordinated protection mechanism for intellectual property rights, improve the diversified resolution mechanism for disputes over intellectual property rights and the assistance mechanism for enforcement of intellectual property rights, and increase efforts to protect intellectual property rights. The state shall continue deepening the reform to facilitate trademark registration and patent application and improving the efficiency of examination of trademark registration and patent applications. Article 16 The state shall intensify the protection of the rights and interests of minority investors, improve the mechanism to protect their rights and interests, safeguard their right to know and participate, and facilitate their enforcement of their lawful rights and interests. Article 17 Unless otherwise provided by any of the laws and regulations, a market participant has autonomy in deciding to join or withdraw from an industry association, chamber of commerce, or any other social organization, free from intervention by any entity or individual. Unless otherwise provided by any of the laws and regulations, no entity or individual may compel, directly or in disguise, a market participant to participate in an appraisal, compliance, commendation, training, evaluation, examination, or any activity akin thereto, or charge a market participant, directly or in disguise, by using any such activity. Article 18 The state shall promote the establishment of a nationwide unified service platform for market participants' enforcement of rights to provide efficient and readily accessible right enforcement services for market participants. Chapter III Market Environment Article 19 The state shall continue to deepen the reform of the commercial system, harmonize the standards for enterprise registration business, data standards, and platform service interfaces, and use unified social credit codes for registration administration. The state shall promote the reform of “separating permits from business licenses,” continue to simplify enterprise-related business licensing items, and put all enterprise-related business licensing items under classification-based management, by adopting direct cancellation of approval, substitution of filing for approval, implementation of notification and undertaking, optimization of approval services, etc., so as to facilitate enterprises in conducting related business activities after obtaining a business license. Except in a specific field as specified by laws and administrative regulations, no enterprise-related business licensing item shall be used as a prerequisite for enterprise registration. Relevant government departments shall, in accordance with the relevant provisions issued by the state, simplify the procedures required to be initiated from application for the establishment of an enterprise to its fulfillment of general business conditions. Each region shall fix and publicly disclose a specific processing time, to the extent of the time limit for the establishment of an enterprise as specified by the state. If an enterprise applies for domicile and other related modification registration, the relevant department shall process the application in a timely manner, in accordance with the law and without imposing restriction. Except as otherwise provided by any of the laws, regulations, and rules, a relocated enterprise which holds a valid permit is not required to apply for a new one. Article 20 The state shall continue to relax market access and implement a national unified market access negative list system. Any field not on the market access negative list may be entered by various market participants lawfully and equally. A region or department shall not separately develop a negative list in the nature of market access. Article 21 Relevant government departments shall increase their efforts to take anti-monopoly and anti-unfair competition enforcement actions, effectively prevent and stop monopolistic actions, unfair competition, and abuse of administrative power to exclude or restrict competition, and create a market environment for fair competition. Article 22 The state shall establish and improve a unified and open human resources market system of orderly competition, eliminate urban and rural, regional, and industry segregation and discrimination based on identity, gender, and the like, and promote the orderly flow and reasonable allocation of human resources. Article 23 The government and its relevant departments shall improve policies and measures, strengthen innovation services, encourage and support market participants in expanding innovation space, continue to advance innovation in products, technologies, business models, management, and the like, and maximize the role of market participants in boosting the transformation of scientific and technological achievements. Article 24 The government and its relevant departments shall strictly implement the tax and fee reduction policies of the state, promptly research and solve the specific problems in their implementation process and ensure that the tax and fee reduction policies fully and promptly benefit market participants. Article 25 Government-managed funds, enterprise-related administrative charges, and enterprise-related security deposits shall be imposed with the justification of the laws and administrative regulations, or with the approval of the State Council. Government-managed funds, enterprise-related administrative charges, enterprise-related security deposits, and government-fixed charges for commercial services shall be put under list-based management and disclosed to the public, and unless on the list, such charges and security deposits may not be levied. The substitution of financial institution bonds for cash in paying enterprise-related security deposits shall be promoted. Article 26 The state shall encourage and support financial institutions by increasing support for private enterprises and small and medium-sized enterprises so as to reduce their comprehensive financing costs. Financial regulatory authorities shall improve the regulatory evaluation and incentive mechanism for financial institutions, such as commercial banks, encourage and guide their increasing credit extensions to private enterprises and small and medium-sized enterprises, reasonably build up the support of medium and long-term loans and fiduciary loans, and raise the efficiency of loan approval. A commercial bank or any other financial institution may not impose unreasonable conditions for credit or discriminatory requirements on private enterprises and small and medium-sized enterprises. A com......