Red Tape Round-Up

With the 17th National Congress of the Chinese Communist Party in full swing in Beijing, we thought it would be a good time to see what leaders there are doing about corruption. Here's some of what we found.

Red tape is out. The CCP says that since 2002, 68 national government departments have rescinded or amended 1,806 of their 3,605 administrative approval items for new businesses. We're not always sure about China's statistics, but these sound positive. At the provincial level, too, times are changing. The Party says local governments have canceled more than half their regulations. It cites the Zhejiang government, which "slashed the number of required approvals for new businesses from 3,251 to 630 in five years, and Chongqing, which canceled 312 items last year alone."

One reformer from the Party said cleaning up the country's over-regulated administrative approval system -- making it simpler and more transparent for new businesses to get up and running -- is essential to cutting corruption. He cited the example of "a city government in Henan Province that established a 'steamed bread office,' which required the registration of every person in the city who wanted to make and sell steamed bread." He also reported the story of "a south China farmer who took two years to acquire the 270 official seals needed to establish a poultry farm, by which time he found the business was no longer viable."

Notwithstanding the steamed bread office in Henan Province, the World Bank says China is making steady progress. It reduced the time to register a new business from 48 days in 2005 to 35 days in 2006. And new online customs procedures reduced the time to import and export by two days.

That's good news, because red tape and corruption are always best friends. And China -- though trying to help its citizens and foreign investors -- still has a long way to go in both departments. For now, FCPA compliance there remains difficult, and the red tape means compliance red flags are always in sight.

View the "News of the Communist Party of China" Here.

View a Summary of the World Bank's Doing Business Report 2007 Here.