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Chinese Government’s Deepening Reforms Turn Attention Toward ‘Red Hats’

| Feb 28, 2015 07:41 PM EST

Many people resign from their jobs at the Great Hall of the People after years of working.

During the period before China's two most-important political, decision-making gatherings, the 12th National People's Congress (NPC) and the National Committee of the 12th Chinese People's Political Consultative Conference (CPPCC), news of another new measure was announced on Friday.

A State official informed the media that "red-hatted" intermediary services will be subject to further regulations as part of an overall strategy to streamline the administrative approval process and tackle corruption.

"Red hat" is the label given to those businesses that are connected in some way with the official organs of the Chinese administration, including government departments that are no longer active. Some are administered or supported by the nation's government, while others accommodate retired senior officials in vocational roles.

Wu Zhilun of the State Council office of administrative review and approval reform explained the problematic situation that the new regulations seek to address:

"The underlying problem is the link between these businesses and the powers that be. The solution is cutting these links or demanding transparency."

A document distributed at Friday's press conference shed further light on the administrative approval issue. The details showed that central government departments controlled 1,526 approval items during the 2013 annual period, while around a third have since been cancelled or delegated to lower stratum of the administration. By the close of last year, 205 were abolished and another 248 are slated for cancellation in 2015.

Even though changes have already been made in the area of administrative approval, a portion of applicants are still being required to seek the approval of intermediaries for the purpose of evaluation, authentication or review reports.

The State believes that if it successfully refines the administrative approval process, the benefits for the Chinese people include an improved job market, bolstered economic and social development, and less corruption.

Wu told reporters that the country can expect the new regulations to come into effect in "one or two months."

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