At the beginning of 1997, Shenzhen Municipality Government pioneered a special reform of the administrative review and approval system. The system was put into overall operation in February 1999. In the first round of reforms, the number of cases to be reviewed and approved at the municipal level was reduced from 1091 to 628. In March 2001, the second round of the reforms was launched, aiming at further reducing these 628 cases by 30 percent. The measures are as follows:
- Project applications not requiring review and approval are decided upon by the enterprises themselves or are delegated to lower authorities or certain agencies.
- The indexes and quotas for business operations are put forward for auction or open bidding.
- The items that really need review and approval are handled in a unified way according to the formalities of preparing the documents in a window, decision-making by specialists, and management by classifications.
- In addition, follow-up monitoring and management liabilities of the review and approval agencies are clearly stated.
Shenzhen Municipality plays a pioneering role in China in the reform of administrative review and approval systems. On the basis of learning from the advanced experiences of the Three Systems of Haikou, Hainan Province, Shenzhen has made several innovations, such as the enhancement of decision-making by specialists, management by classification, and combined handling of projects sharing common features. Moreover, Shenzhen Municipality pays close attention to the shift of governmental function from pre-positioned review and approval to follow-up monitoring and management. All these improvements reflect the creativeness of Shenzhen in the reform of administrative review and approval systems. The Office of Institutional Reform, the Bureau of Legal Systems, and other agencies of Shenzhen Municipality carefully examine project applications and select those to be delegated to the relevant functional agencies in the municipal government. Other local governments in China may learn from Shenzhen and reduce the items for review and approval the same way; therefore, the reform takes on greater significance in its wider application. The reform of the review and approval system has played a significant role in improving the investment atmosphere and attracting investors to Shenzhen. A large increase in the number of approved and filed investment applications by foreign and private enterprises since 2000 clearly demonstrates this. Of course, the economic benefits produced from this reform are also significant.