Ramping Up Reforms

　　The Chinese Government released a rangeof reform and opening up policies， as is customary，ahead of the Third Plenary Session of the 18thCentral Committee of the Communist Party of China(CPC)， which ran from November 9 to 12. This year，the corporate registration system was included inthe reform package.

　　On October 25， Premier Li Keqiang hosted anexecutive meeting of the State Council， and gave fivespecific instructions for reforms of business operations.These measures indicate another major reformof the modern corporate system.

　　“By widening market access and establishing atransparent and efficient modern company registrationsystem， we aim to further streamline governmentadministration， create fair competition andsupport smaller businesses， especially innovativeenterprises，” Xinhua News Agency reported Li as sayingat the meeting.

　　Encouraging startups

　　As China’s first corporation law was published in1993， the modern corporate system has been inplace for a mere 20 years. At that time， China adopteda legal capital system. That is to say， companieshad to have registered capital paid in full. Moreover，startups were required to ensure that the value ofcorporate assets was equivalent to registered capital.It was not until 2005 that the statutory capitalsystem was replaced with an authorized capitalsystem， which didn’t demand stakeholders to payregistered capital in full. This system also reducedthe minimum requirement of registered capital forlimited liability companies and joint stock companiesto 30，000 yuan ($4，900) and 5 million yuan($820，500)， respectively. This greatly lowered thethreshold for startups and boostedthe enthusiasm to invest.

　　Nonetheless， the old corporateregistered capital systemhas lagged behind the economicchange and entrepreneurialenvironment. Therefore， it canno longer meet the demands ofinnovative， small and micro-sizedenterprises. As countries acrossthe world try to create a favorableinstitutional environmentfor startups， such thresholds arehandicaps for entrepreneurs.

　　In 2009， within the scope ofrelated laws， rules and regulations，the State Administration for Industryand Commerce began to carryout a pilot program of corporateregistration system reforms in Beijing， Shanghai andsouth China’s Guangdong Province.

　　In Pudong District， Shanghai， the requirement forregistered capital has been completely eliminated，and measures facilitating flexible ways of registrationhave yielded satisfactory results.

　　The newly released company registered capitalsystem also needs to be justified through pilot programexperience.

　　Zhang Liqun， a research fellow from the DevelopmentResearch Center of the State Council， arguedthat the reforms indicated the government hadshifted from examinations and approvals to supervi-sion， and would significantly restrain administrativeforces from interfering in the market. In thefuture， it will be easier for entrepreneurs to start acompany， while the government will be stricter inmonitoring corporate operations.

　　The move will help improve the investment environment，intensify the stable economic upswing，and stimulate the vitality of social investment.

　　Predating the unveiling of reforms on the registeredcapital system， a “383 Plan” for reform wassubmitted by the Development Research Centerof the State Council to the Third Plenary Sessionof the 18th CPC Central Committee. The blueprintquickly stirred up heated debates.

　　Inclusive market economy

　　The plan aims to set up a vibrant， innovative，inclusive market economy protectedby the rule of law. It listed a reform trinity- the market， government and corporations，eight key sectors and three packagesfor likely breakthroughs， and has thus beendubbed the 383 Plan.

　　The plan involves a succession of hotissues， many of which are also the difficultiesconfronted by China. Some policyadjustment measures are bold， decisive andinspiring.

　　The blueprint indicates a heavy focus on reformsthis time round， reforms that will be pushed forwardwith much determination in more sectors， reminiscentof the landmark Third Plenary Session of the11th CPC Central Committee held in late 1978.

　　Looking back at that plenary session， whichraised the curtain on China’s reform and openingup， the country moved forward carefully andcautiously， and mistakes， to some extent， weretolerated.

　　Today， things have changed. Reforms have toaddress deep-seated institutional loopholesand emerging challenges. Hence， thereis little room for error.

　　Naturally the 383 Plan cannot solveall the problems that hinder China’sprogress， and more reforms will follow.This year， the new Chinese leadershiphas unveiled seven reform policies，including reducing administrativeintervention， expanding the pilotprogram of replacing business tax witha value-added tax， and interest rate liberalization.

　　In the following days morein-depth measures and policies will bedecided on to push China’s reform andopening up even further.