Shanghai upgrades reforms to foster world-class business environment

Shen Mengdan
Shanghai issues a new action plan to foster a first-class business environment for better trade and investment by improving administrative efficiency, government services etc.
Shen Mengdan
Shanghai upgrades reforms to foster world-class business environment

Shanghai unveiled a new action plan on Sunday to help foster a first-class business environment with more convenient trade and investment, improved administrative efficiency, better government services and a full-fledged legal system.

The business environment is an important manifestation of a country's institutional soft power and market operation efficiency. Since the debut of the business environment reform at the end of 2017, there have been seven versions of action plans, with an annual update aimed at constant optimization.

"There is a 'temperature difference' between the feelings of enterprises and government policies," said Lu Aiguo, director of the Business Environment Construction Division of the Shanghai Development and Reform Commission. He believes that many of the policies issued by the government are not well received by enterprises and need more publicity.

To reduce this information gap, the general office of the Shanghai Government issued the newest 7.0 version of the business environment reform.

Compared with the previous versions, the 7.0 version is more concise, with a total of 150 rules instead of the 208 in 2023, aiming at a clearer guideline for business entities.

Shanghai's business environment has improved significantly since 2018. China has risen from 78th place in 2018 to 31st place in 2020 (the latest year of evaluation) in the World Bank's global ranking of business environment, according to official statistics.

By the end of 2023, the Shanghai boasted a total of 2.892 million enterprises – the highest density in China.

The new action plan includes the following highlights:

1. International standards

  • Business entry: upgrading the services of the Shanghai Online Business Registration; establishing a standardized registration information database for business residences; and promoting the nationwide unified electronic business license system and the "Business Entity Identity Code."
  • Business location: reforming the commitment system for enterprise investment projects; creating a one-stop online work platform.
  • Public facilities: building a unified citywide database of underground pipelines; reforming the approval mechanism for road excavation; publicizing online information on water pricing, water supply reliability, and water quality; guaranteeing fair access to broadband for business buildings.
  • Labor and employment: improving Shanghai's public employment and recruitment platform; creating a distinctive odd job market; optimizing the mechanism for handling labor disputes; building an expedited arbitration team for disputes over wages of migrant workers.
  • Financial services: implementing policies related to green credit; strengthening the supervision of green financing, secured transactions, and electronic payments; improving the efficiency of enterprise financing matchmaking, loan approval and disbursement.
  • International trade: improving the Shanghai International Trade Single Window, a national public information platform for enterprises; building a cross-border data exchange system; strengthening the training of enterprises and services for AEOs (Authorized Economic Operation); improving the access standards for rapid examination as well as the approval of tax reductions and exemptions; optimizing the inspection process at ports.
  • Tax payment: disclosing taxpayers' suggestions regularly; releasing a white paper on the business environment for taxation; enhancing the transparency of information on tax collection and management; optimizing the process of online correction and declaration for e-taxation; publicizing the policy of reducing taxes and fees; promoting the application of e-invoices.
  • Commercial dispute resolution: establishing a diversified mechanism for litigation, arbitration and mediation of foreign-related commercial disputes; building an international first-class arbitration institution; promoting local legislation on commercial mediation; building a "digital court"; standardizing fees of intermediaries.
  • Market competition: popularizing China's Anti-Monopoly Law and its accompanying regulations, guidelines and instructions; improving the mechanism for overseas intellectual property rights protection and assistance, as well as the mechanism for coordinated protection of IPRs; popularizing IPRs public services; remedying various irregularities of suppliers.
  • Insolvency: improving the review mechanism for bankruptcy cases; establishing a bankruptcy protection mechanism for micro, small and medium-sized enterprises; improving the credit repair mechanism for bankruptcy-restructured enterprises; optimizing the fees for government-priced judicial appraisal services.

2. Enterprise Services

  • Government services: promoting the centralization of enterprise services at government affairs service centers of each district; providing enterprises with capital subsidies and tax incentives; simplifying the steps for obtaining certificates to avoid the duplication of submitted materials.
  • Policy services: designating standards for enterprise-friendly policies; meeting the personalized demands of enterprises; improving the convenience of high-frequency policy declarations; interpreting hot policies for various types of enterprises.
  • Industrial park services: formulating a service code for creating a standardized business environment in industrial parks; building "leading parks (buildings)" as models.
  • Foreign-related services: pooling various foreign-related service resources; releasing foreign-related policies in multiple languages; establishing a standardized collaboration platform for Shanghai's foreign-invested enterprises; expanding the services for foreigners' work and residence; loosening working permits for foreigners from Class A to Class B; widening the application areas of the new version of the foreigner's permanent residence ID card.

3. Law enforcement

  • Comprehensive supervision: disclosing the annual administrative inspection plans of each department in advance; promoting the "inspection code"; standardizing administrative inspections involving enterprises; refining the criteria for mitigating administrative penalties; implementing the city's unified comprehensive law enforcement system.
  • Intelligent supervision: promoting the use of big data, artificial intelligence and other technologies to conduct off-site inspections; setting up a list of risk spots for prepaid consumption areas such as beauty salons and fitness studios; creating a unified and standard digital system for market supervision.
  • Credit supervision: implementing differentiated supervisory measures; increasing the frequency of random inspections of enterprises that have violated the law and breached credit; launching campaigns to clean up delinquent accounts owed to enterprises.
  • Regulation of new industries: refining responsibilities and division of labor; supporting the headquarters of food companies in R&D centers to add food production functions; refraining from administrative penalties and administrative coercive measures in the area of market regulation.
  • Rules and regulation: promoting regularized law inspections and compliance inspections; formulating standards for industries such as finance, intellectual property, AI, medical and life sciences.

4. Regional Innovation

  • Make the Pudong New Area a comprehensive demonstration zone. Measures include: expanding the categories of imported goods exempted from compulsory certification measures; promoting the application of digital RMB; encouraging independent arbitration of foreign-related commercial disputes; promoting the opening up of major scientific and technological infrastructures to all kinds of domestic and foreign innovation entities.
  • Make the Shanghai Pilot Free Trade Zone's Lingang section a place of innovation. Measures include: supporting the outward flow of enterprise data for regular usage; building a Lingang branch of the Intellectual Property Protection Center; constructing a one-stop service mechanism for foreign-related labor and personnel disputes; setting up a channel linking enterprises and legal service institutions in the zone.
  • Highlight the function of international trade in the Hongqiao International Central Business District. Measures include: building a "Silk Road E-commerce"; piloting the implementation of international high-standard e-commerce rules; building the Hongqiao International Business Talent Port, the Hongqiao International Central Legal Affairs District, and a one-stop comprehensive service center for foreigners.
  • Create different business environments with the characteristics of each district. Measures include: developing innovative pilot business environments that take the characteristics and foundation of each district's own industrial development into account.

5. Collaboration and Co-construction

  • Strengthen cooperation among the government, enterprises, society and schools, and enhance the management of statistical survey programs involving enterprises.
  • Build an efficient problem-solving mechanism.
  • Strengthen the assessment and evaluation of the business environment.
  • Promote joint construction of the business environment in the Yangtze River Delta region with data sharing.
  • Increase publicity on the business environment and carry out various forms of research pertaining to it.

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