China Releases Notice on Pilot Reform of Construction Project Approval System

Takehome: China plans to simplify procedures used in construction projects approval and administrative approval.

According to a release on May 18, China State Council has decided to proceed with a pilot reform scheme designed to lower government costs and enterprise operational costs. The reform will focus on improving the construction approvals for residential buildings and city infrastructures. It will also address the administrative approval system and other matters such as technical examination, intermediary services, municipal public services and filing and will be piloted in 15 regions, including Beijing, Tianjin, Shanghai and provinces such as Guangzhou, Zhejiang, etc. Within the year, the government aims to build a new administrative framework to more efficiently manage approval which is expected to reduce waiting times from 200 workdays to 120. These reforms will be realized nationwide by the first half of 2019 and will in the future incorporate refinements and modifications based on the results of an ongoing feasibility assessment which will be carried out during the pilot program. Along with further reductions in approval items and duration, a unified national construction project approval and management system will be basically established by 2020.

The reform will mainly focus on the following 4 aspects:

1. Unify the approval processes. The government plans to streamline approval processes and improve efficiency with two measures, category management and joint approvals, namely, determining the corresponding approval process on the basis of category and assigning a leading department to organize and coordinate relevant departments to complete the process in strict accordance with time limits in each period.
2. Simplify the approval procedures. The State Council aims to eliminate unnecessary approval items and preconditions, delegate power to lower level authorities, adopt an interagency coordination approach for simultaneous reviews and site inspections, implement an information dissemination and pledging system and reorder the approval sequences to accord with practical work demands. Information dissemination and pledging system requires that applicants shall make a written commitment according to the requirements released by government on approval items and specific requirements. With the written assurance, relevant department will directly approve the application and conduct follow-up supervision and inspection within the stipulated time. However, if the pledge remains unfulfilled the applicant will have his earlier approval cancelled and will be held accountable.
3. Perfect the approval system. The State Council is also about to improve the approval system, implement unified and coordinated management, provide all-around services, integrate the application documents and regulate the approval process.
4. Strengthen supervision and management. The government will enhance in-market and post-market surveillance, set up a credit system for enterprises and individuals and regulate intermediary and city public services.