In the news: Companies pour into FTZ, NDRC in hiring spree and approvals ease
December 13, 2013 | BY
clpstaff &clp articles &In just two months 1,400 companies have registered in the Shanghai FTZ. China's top antitrust regulator is to hire 170 employees next year and the State Council has eased administrative approvals
Shanghai FTZ attracts 1400 companies
The FT reported that more than 1400 companies have registered in the China (Shanghai) Free Trade Zone in the two months since its launch. Ai Boajun, head of the FTZ's administrative committee, dismissed any comments of a disappointing start for the Zone. His remarks came despite only two foreign banks establishing branches in the Zone on its opening day. That number has since risen to 12. Ai added that a further 6,000 companies are in the process of applying. Reforms in the Zone mean foreign companies can obtain business licences in four days, as opposed to an average of 29 outside the Zone.
Any rhetoric from an official in the Zone has to be positive as the government wants it to succeed. It is good news that more companies are interested in the Zone. They are realising that it will be a good move as openness and ease of doing business are positives. However, some companies might have felt pressure to register in the Zone in order to gain favour with the government. The first companies to apply may have had this in mind.
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NDRC gets resource boost
China Daily reported that the country's top antitrust regulator will increase its manpower next year in order to combat price fixing. Xu Kunlin, head of price supervision at the National Development and Reform Commission (NRDC) made the comments on Wednesday. Xu said his Bejiing department and local offices will recruit at least 170 new employees for the antitrust law enforcement team. Around 20 of the new personnel will be based in Beijing, with the rest joining local units around the county.
This is an unprecedented expansion for the NDRC, especially considering its Beijing office only has 46 employees. The move reflects China's determination to battle price fixing and protect fair competition. Extra employees in local offices will make investigations easier due to close connections with local governments. Price fixing investigations saw a huge increase this year as foreign and domestic companies received fines and warnings. It is clear this will continue in 2014 and it will be interesting to see if the NDRC will offer companies remedial measures as enforcement increases.
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Approval procedures cut
Xinhua reported that the State Council will remove or modify 340 administration, examination and approval items. The move will further clear obstacles for social and economic development and curb corruption. The decision was included in a statement on Wednesday after an executive meeting, presided over by Wen Jiabao. According to the statement, 184 approval items are to be cancelled with 117 items handed down to lower-level government departments. A further 13 items will be merged into other items.
It is always good news when approval procedures are made easier. Foreign investors often complain of China's lengthy approval processes and will be pleased to hear that the reductions mainly cover investment items. However, it remains to be seen how local-level arms of the government will interpret the reductions. They have been known in the past to enjoy extended approval time frames, slowing down projects.
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