Interpretation of the Notice of the General Office of the State Council on Launching the Pilot Program of the Reform of the Approval System for Construction Projects

Recently, the General Office of the State Council issued the Notice of the General Office of the State Council on Launching the Pilot Program of the Reform of the Approval System for Construction Projects (hereinafter referred to as “the Notice”). The spokesperson of the Ministry of Housing and Urban-rural Development (MOHURD) has interpreted this policy.

I. What is the background of the Notice

The Party Central Committee and the State Council attach great importance to the creation of a good business environment and the work related to the reform of administration streamlining, power delegation, regulation improvement and service optimization. General Secretary Xi Jinping has stressed that efforts shall be made to remove and abolish various regulations and practices that hinder the single market and fair competition to stimulate the vitality of various market entities and implement sophisticated policies that promote the liberalization and facilitation of trade and investment. Premier Li Keqiang has pointed out that business environment directly determines competitiveness and productivity; the focus of promoting economic development must be shifted from “projects” to “the environment” and efforts shall be made to deepen the reform of administration streamlining, power delegation, regulation improvement and service optimization.

In recent years, all relevant parties have achieved remarkable results in deepening the reform of administration streamlining, power delegation, regulation improvement and service optimization, providing enterprises and the masses with easy access to government services, facilitating enterprises and the masses in starting a business, effectively reducing institutional transaction costs and accelerating the transformation of government functions and work style. However, it should also be noticed that there are still noticeable problems in the approval of engineering construction projects, including excessive and time-consuming procedures and difficulties in accessing government services. In this January, the executive meeting of the State Council assigned MOHURD to lead a special program for improving the ranking of China in terms of dealing with construction permits and promote the reform of the approval system for engineering construction projects. On March 5, Premier Li Keqiang clearly put forward the requirement of “reducing the time for approval of engineering construction projects by half” in the Government Work Report. Vice Premier Han Zheng listened to reports several times and held a meeting to discuss and assign the related work.

According to the work plan of the State Council, MOHURD works with relevant parties to promote the reform of the approval system for engineering construction projects. First of all, MOHURD carefully reviews the approval process. According to the results of preliminary investigations, the items to be approved and the time consumed for approval vary significantly in different regions and for different projects due to the overlapping of various laws, regulations and stipulations. And the items, processes, time, and basis for approval remind unclear in some regions. Secondly, MOHURD focuses on problems repeatedly reported by enterprises and the masses, including difficulties in accessing government services, low efficiency of government services, and the need to repeatedly visit different departments for a single matter, to discover unpleasant and pain points in the approval of engineering construction projects, such as overlapping, improper methods and scattered management, and find out the root reason for the low efficiency of the approval process. Thirdly, MOHURD learns from domestic and foreign experience and summarizes the practices of relevant local governments in promoting “the integration of regulations”, improving and optimizing the approval process, “handling the approval procedures of an engineering construction project at one time”, “handling the approval procedures of an engineering construction project online at one time and within a short time” and “online approval” to optimize and improve various measures for the reform of the approval system for engineering construction projects. Fourthly, MOHURD adheres to the principle of first promoting the reform in key areas and guides and urges Beijing and Shanghai (which are the sample cities selected by the World Bank for evaluating the business environment of China) to release special action plans to improve the ranking of China in terms of dealing with construction permits. Fifthly, MOHURD introduces reform pilot programs, determines to carry out pilot programs in Beijing, Tianjin, Shanghai, Chongqing, Shenyang, Dalian, Nanjing, Xiamen, Wuhan, Guangzhou, Shenzhen, Chengdu, Guiyang, Weinan, Yan’an and Zhejiang through negotiation and puts forward the work objectives and task requirements for the reform through discussion.

II. What are the main goals of the reform

The main goals of the reform are to complete the institutional framework and management system for the approval of engineering construction projects in pilot areas in 2018 and reduce the time of approval by more than half; carry out the reform of the approval system of engineering construction projects nationwide in 2019 and reduce the time of approval to 120 working days in the first half of 2019; preliminarily complete the construction of a nationwide unified approval and management system of engineering construction projects in 2020.

III. What are the main tasks and measures of the reform

The Notice mainly clarifies the tasks and measures of the reform in three aspects:

(1) Unifying the approval process. Firstly, the engineering construction project approval process is divided into four stages according to the engineering construction procedures, including land use planning permission, engineering construction permission, construction permission and completion acceptance. Relevant approval items shall be included into corresponding stages. Secondly, engineering construction projects are managed according to project types, investment types and project scale. The approval process is refined to determine the approval stages and items. Thirdly, the parallel approval is implemented. For each approval stage, a leading department shall be appointed on the principle of “one leading department, parallel approval, and completion within a prescribed time limit”.

(2) Simplifying approval procedures. Measures should be taken to remove, delegate, integrate, transform and adjust items that can be removed, delegated, integrated, transformed and adjusted in the of engineering construction project approval process. The first is “removal”, which means to remove unlawful, unreasonable and unnecessary approval items and preconditions, such as cancelling the filing of construction contracts and building energy efficiency design review. The second is “delegation”, which means to expand the scope of approval items delegated or entrusted to authorities at a lower level on the principle of providing enterprises and the masses with easy access to government services and to make sure that authorities at a lower level are competent. The third is “integration”, which means to integrate multiple approval items managed by the same department that have similar management tasks or belong to a same approval stage into one approval item. Joint investigation, joint mapping, joint drawing checking, joint acceptance and other measures shall be adopted. For example, fire protection design review, civil air defense design review and other such technical reviews can be integrated into the construction drawing design review, and relevant departments no longer conduct technical review. The fourth is “transformation”, which means to transform matters that can be solved by approving authorities through seeking for the opinions of relevant departments into internal coordination matters of the government. A notification and promise system shall be implemented, where the government announces the list of approval items and specific requirements under the notification and promise system, the applicant makes a written commitment as required and the approving authorities directly make decisions on approval and supervise the applicant to fulfill the commitment. The fifth is “adjustment”, which means to improve the corresponding systems so that the approval sequence will be more in line with the actual work. For example, the application for the installation of water supply facilities, power supply facilities and other municipal infrastructure can be approved after the construction permit is issued.

(3) Improving the approval system. The improvement of the approval system is the basis for the reform of the engineering construction project approval system to mainly include “five ones”, that is, “one blueprint, one system, one window, one form, and one set of mechanisms”. First of all, “one blueprint” coordinates the implementation of projects, that is, to coordinate various departments to propose project construction conditions based on the “one blueprint” of “integration of multiple regulations”. Secondly, “one system” means to implement unified management and form a comprehensive and in-depth approval management system for engineering construction projects through integration, so that the approval of all projects will be carried out on one system. Efforts shall be made to strengthen the guidance and supervision of local governments’ approval of engineering construction projects through the approval management system for engineering construction projects. Thirdly, “one window” provides comprehensive services. And a foreground acceptance and background review mechanism shall be established to realize the provision of external services and management with one window. Fourthly, “one form” refers to integrate application materials, so that the approval of various items can be completed with one service guide, one application form and one set of application materials at every approval stage. Fifthly, “one set of mechanisms” is to regulate the operation of approval process, establish a sound supporting system and specify departmental responsibilities, work procedures and coordination and supervision mechanisms to ensure seamless integration of all approval stages.

IV. How to strengthen the supervision in the course of reform

Efforts shall be made to adhere to the principle of combining power delegation and regulation improvement and putting emphasis on both power delegation and regulation improvement. While promoting the reform of the approval system for engineering construction projects, corresponding supervision systems shall also be established and improved.

First of all, efforts shall be made to strengthen post-event supervision, establish a transparent, standardized, efficient and coordinated supervision mechanism, comprehensively implement the “Two Random and Public Disclosure” inspection (that is, random inspections by randomly selected law enforcement officers or inspectors and prompt public disclosure of results), intensify supervision and inspection, and seriously investigate and punish illegal behaviors and violations. For approval items that are subject to the notification and promise system, approving authorities shall inspect applicants’ fulfillment of their commitments within the prescribed time. For applicants failing to fulfill their commitments, the administrative decisions on the approval they received will be revoked and they will be held accountable for their failures.

Secondly, efforts shall be made to improve the credit system, establish a system of credit record and blacklist, disclose the illegal behaviors, violations and non-fulfillment of commitments of enterprises and employees to the public and build a joint punishment mechanism of “untrustworthiness in one place, leads to constraints everywhere”.

Thirdly, efforts shall be made to regulate intermediary and municipal public services, establish a sound management system, implement a service commitment system, clarify service standards and procedures and regulate service charges. Public utility organizations shall conduct operations in strict accordance with national laws and relevant regulations, disclose procedures, improve the transparency of work and implement the system of completing affairs within limited time.

V. How will MOHURD implement the Notice?

MOHURD will cooperate with relevant departments to guide local governments to complete the work.

First of all, MOHURD will strengthen organizational leadership. MOHURD should earnestly shoulder the responsibility of organizing, coordinating, supervising and guiding the reform of the engineering construction project approval system. All relevant departments should strengthen cooperation. In the pilot areas, leading teams for the reform of the engineering construction project approval system should be established, where main responsible persons shall serve as the team leaders, to study major issues, clarify the target requirements, improve the working mechanism and determine the sharing of responsibilities among various levels.

Secondly, MOHURD will strengthen the guidance on the pilot work. MOHURD will cooperate with relevant departments to supervise and guide the pilot areas to discuss and develop implementation plans for pilot projects in accordance with the requirements of the Notice. Efforts will be made to strengthen special training and guide the pilot areas to carry out reforms through policy interpretation, experience exchange, and field visits; enhance communication with the pilot areas, keep track of the progress of reforms in the pilot areas on a regular basis and timely discuss and solve problems encountered in the reform; timely summarize the pilot practices, generate reproducible and scalable experience and guide local government all over China to carry out the reform of the engineering construction project approval system.

Thirdly, MOHURD will carry out evaluations. MOHURD should cooperate with relevant departments to establish an examination and evaluation system for the engineering construction project approval system, focus on the evaluation of the implementation of a reform covering all processes and areas in pilot areas and evaluate the progress of pilot areas in unifying approval processes, streamlining approval procedures and improving the approval system. The governments of the pilot areas should make greater efforts to supervise the reform work of relevant departments and follow up on and supervise the progress of reform tasks.