China Market Intelligence: Jan-feb 2009 China Business Review

China Market Intelligence

NPC and State Council Transparency Commitments: An Evaluation

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he National People’s Congress (NPC) and State Council both announced initiatives in spring 2008 to increase transparency and public participation in the formulation of legislation and administrative measures. The US-China Business Council (USCBC) has been tracking NPC and State Council compliance with their commitments in this area since late summer. Based on USCBC’s review, the NPC has been fairly consistent in its transparency efforts, while the State Council has been decidedly less so.

NPC To promote open participation in its legislative process, the Standing Committee of the 11th NPC announced last April that it would solicit public comments on most draft laws and amendments reviewed by the NPC Standing Committee. It also stated it would “in general” post draft laws and amendments that have gone through a first Standing Committee review on the NPC website. In addition, it will release the draft in major media outlets, if the Standing Committee chair determines a draft law to be of immediate public interest. In accordance with its April announcement, the NPC has posted several draft laws for public comment, including the draft Patent and Insurance laws, which were open for comment from August 29 to October 10, 2008. The NPC in late October read three drafts for the first time and subsequently posted them for comment on its website: the draft State Compensation Law, draft Earthquake Protection and Disaster Relief Law, and draft Postal Law.

State Council At the fourth Strategic Economic Dialogue (SED), held in June 2008, China agreed to three significant transparencyrelated points: ■ Publish for comment all draft economic regulations and rules, not just those related to trade; ■ Allow at least 30 days for public comments; and ■ Publish these measures in a single location, the PRC State Council Legislative Affairs Office’s (SCLAO) legislative information website (http://yijian.chinalaw.gov.cn/lisms). Despite these commitments, as of early December 2008, few of the economic regulations and rules released for comment since late summer had been posted on the designated SCLAO website. Though the draft Ozone Depleting Substances Regulations, PRC Customs Services Guarantee Rules, and Administrative Regulations on Registration of Resident Foreign Enterprise Representative Offices had been posted there, others, such as the Technical Rules for the Circulation of Second-Hand Equipment and 12 January–February 2009 chinabusinessreview.com

the Administrative Rules for Special Approval of Drug Registration, had not. Rather, these had been posted for comment only on the websites of the agencies responsible for them—the Ministry of Commerce and State Food and Drug Administration, respectively. In fact, from September 1 through December 1, these and other administrative agencies solicited comments on 14 draft regulations that were not posted on the designated SCLAO website. Moreover, during that period, the website only listed five laws and regulations for comment, two of which, the Social Welfare Law and the People’s Fitness Rules, were not economic in nature. None of the regulations posted on this website have been open for comment for the full 30-day period agreed to during the fourth SED. In addition to the SCLAO website mentioned above, however, the State Council recently added a link to another site (http://bmyj.chinalaw.gov.cn/lisms/action/guest LoginAction.do) to collect public comments on department regulations (internal regulations) and related documents. As of December 1, only three items—an amended draft of a Patent Examination Directory, Procedures for Handling Traffic Safety Violations, and Methods for Examining Land Use Plans—were posted on the site. USCBC is aware of other regulations that the State Council has approved or issued since late summer without posting for comment on the designated SCLAO website. These include the Draft Regulations for Dairy Product Safety and the Value-Added Tax Reform Plan, which was submitted to the State Council in September 2008, approved in November 2008, and took effect on January 1, 2009. In addition, USCBC understands that there are other regulations, specifically the Anti-Price-Monopoly Rules and draft amendments to the Anti-Unfair-Competition Law, that are making their way through the legislative process but have not yet been posted on the SCLAO website for comment. Though the Anti-Price-Monopoly Rules may not be ready for comment, the State Administration of Industry and Commerce has solicited comments on draft amendments to the Anti-Unfair-Competition Law from a few chosen organizations without posting the law for comment on either the NPC or SCLAO websites. The State Council’s uneven implementation of its commitments to transparency and public participation in the regulation-drafting process warrants further monitoring. This article is adapted from a report that first appeared in China Market Intelligence, the US-China Business Council’s (USCBC) members-only newsletter. To find out more about USCBC member company benefits, see www.uschina.org/benefits.html.