BEIJING — The State Council, China's cabinet, on Thursday decided to expand a reform to cut business red tape.

The reform, being tested in Shanghai Pudong New Area, separates business operation permits from business licenses and streamlines approval for new businesses.

A total of 10 free trade zones across the country, including those in Tianjin, Chongqing, Liaoning and Zhejiang, will now implement the reform , according to the State Council.

The reform will put emphasis on eliminating administrative "permits" but increase supervision and information sharing, the State Council said.

Over the past five years, China created a better business environment for both domestic and overseas companies. Through simpler approval process, lower corporate fees and technology-based services, the government is transforming its functions to let the market play a larger role in the economy.

Latest data showed that in the first eight months of this year, 16,000 new companies were registered every day on average, compared with only 6,900 more than three years ago, when business registration reforms were initiated.