Random inspection method to boost market fairness

Move will help increase openness and those found in violation of regulations will quickly face punishment

The random inspection method will be adopted nationwide to supervise China's 31 million enterprise and findings will be quickly released, according to the State Council, China's Cabinet.

It decided to carry out random inspections, in which inspection officials and enterprises are selected by computers from a database to increase fairness, at an executive meeting presided over by Premier Li Keqiang on Wednesday.

Inspection results and punishments handed out to violators should be unveiled to the public in a timely manner, said a statement released after the meeting. Top-level designs will be strengthened to unify all market supervision platforms into a single one while joint law enforcement moves will be conducted by multiple departments, the statement said.

Frequent inspections made enterprises confused about what to do and they got tired of coping with multiple checkups and some departments were also headstrong in inspections, which made space for "rent-seeking", the premier said at the meeting.

During his visit to customs officials in Xingang in Tianjin in 2014, the premier first learned about the idea of random inspections, which reduce the chances of "rent-seeking". It was then promoted among all customs authorities across the country for clearances of imports and exports.

Since July 2015, the method has been promoted as a way to streamline administrative procedures. Since 2016, it has been put in the Government Work Report, delivered by the premier to National People's Congress deputies in March, for three consecutive years.

"Full implementation of random inspections means that all related actions should be encompassed into the random supervision, covering all targeted enterprises and law enforcement officials. All information should be released punctually to be overseen by the public," the premier said at Wednesday's meeting.

As of March, China had more than 100 million market entities, including 31 million enterprises, according to the State Administration for Market Regulation.

As the central government promotes administrative streamlining and entrepreneurship, the country sees more than 15,000 new market entities registered each day, showing the importance of finding a balance between market regulation and placing extra burdens on enterprises.

In China, about 54 government departments have law enforcement powers to examine enterprises, and the random inspection method can avoid overlapping checkups by different departments to ease the burden of enterprises, Ma Zhengqi, deputy head of the State Administration for Market Regulation, told a policy briefing hosted by the State Council Information Office on Friday.

Each year, about 5 percent of all enterprises are randomly examined, said Ma.

A national database of the 31 million enterprises, including information on business registration, administrative approvals and records of penalties and awards they have received, has been established for online checkups. Results will be disclosed 20 days after the inspections, Ma said.

Meanwhile, all officials for market regulation inspections are included on another list for random selections. A lottery system is used to select enterprises and inspection officials, and no one will know who is going to be examined before the lottery, Ma said. Meanwhile, the method can also improve efficiency, considering the limited number of market regulation officials, and optimize the business environment, he said.

In some regions, such as Beijing, people can find information for local enterprises via online channels such as the mobile internet, and this boosts transparency, Ma said.

An integrated list of such inspections will be released in the second half of this year and will be used next year to strengthen compliance oversight, he added.

Experts said the random inspection method, seen as part of strict compliance oversight promoted by the central government in recent years, can promote equality among enterprises.

Wang Yukai, deputy president of the China Society of Administrative Reform, said a market environment of fair competition is needed to protect innovation and boost economic growth as the growth model has significantly changed from previous years.