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A senior legislative official yesterday asserted that the new Law on Administrative Licensing will be a great help in China's efforts to build a market economy and check corruption.

Administrative licensing, referring to the issuing of formal legal permission to conduct business or business-related activities, is a major government function.

"The law will have far-reaching impact on our country's economic and social life,'' said Li Fei, vice-director of the Legislative Affairs Commission under the Standing Committee of the National People's Congress (NPC).

Li said the law, a set of comprehensive rules for the establishment and implementation of administrative licensing, has managed to balance the rights of citizens and the duties of government.

It is expected to greatly reduce the amount of administrative licensing, hazardous expansion of which has seriously hampered China's efforts to build a market economy.

The law, which takes effect on July 1, states that only the NPC, the State Council and local people's congresses have the right to determine whether one activity needs an administrative licence. Departments under the State Council will no longer have the right to do so.

Li said the now clearly defined relationship between the government and the market will help the government abandon traditional management methods that bordered on direct interference in social and economic activities. The new law is aimed at more rational macro control and offers more social services.

As a result, social intermediary organizations and industry associations will play a larger role in the country's economic activities.

He added that simplified procedures to get an administrative licensing will also bring more convenience to citizens, corporations and other institutions.

Li said that in addition to helping the government shift its function, the law is expected to help stop close-door deals and trading money for power.

He was echoed by Wang Yongqing, vice-director of the Legislative Affairs Office under the State Council and one of the drafters of the law.

Wang said most of the corrupt officials now behind bars were involved in such acts.

"We gave top priority to how to prevent and check corruption in the issuing of administrative licence when we started to draft the law, and the majority of its provisions were designed to achieve this goal,'' he said.

Overuse of licensing invites corruption because it creates more opportunities for kickbacks, said Ying Songnian, professor and director of the Division of Law of the National School of Administration.

Complicated procedures, poor efficiency, and underground, unfair or imprecise conditions for granting licences all contribute to the problem, he added.

The State Council began a nationwide campaign to rectify the situation in 2001.

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