The abolition of 71 approval items and the delegation of a further 20 to lower level governments last week were substantial moves to facilitate private investment and inject vitality into the country's economic growth.

Tightening the approval procedure chokes the development of an industry and loose administration results in chaos, so the central government has to strike a balance between reasonable administration and a simplified approval procedure.

However, there are concerns that an easier channel for investment in industrial projects could result in further environmental degradation and the excessive development of some industries.

Such concerns are not unjustified. For example, even when the Ministry of Environmental Protection maintained the power of assessing the environmental impact of an industrial project, there were times when construction started before approval was granted. Now there is no need for some projects to get approval from the central government, it is even more likely that local governments will collaborate with enterprises or investors in disregard of the environmental consequences.

Premier Li Keqiang has stressed time and again that after the abolition of approval items the government will still have a supervisory role. The message is that a project can go ahead without getting approval as long as it abides by all the rules.

For example, the investment in a pulp mill no longer needs to get approval from the government, but should it pollute the environment, the environmental protection department has the right to stop operations.

In other words, instead of processing and approval, both central and local government departments must conduct investigations and check whether an economic activity conforms to State policy.

For the central government, the abolition and delegation of so many approval items mean an even heavier workload. It was not unusual for some local governments or enterprises to circumvent State Council policy in getting a green light to launch a project. Now the central government will have to play the role of a watchdog, identify where the problems are and then effectively address them.

Therefore the government must make even higher demands of itself so as to establish an efficient mechanism that enables it to effectively perform its duties as a watchdog.

(China Daily 05/21/2013 page8)