China will soon announce a reform plan for the country's investment system which will largely cut red tape during the project approval process.

The State Council ratified the reform plan on Wednesday night aiming to improve government efficiency and to encourage investment.

The plan, which is expected to take effect in July, will eliminate the current practice of examination and approval on projects invested by companies.

It will be replaced by government approval and registration, or simply putting the projects on record, Jiang Weixin, vice director of the State Development Planning Commission, said at a business meeting earlier last year.

The commission is responsible for drafting the plan.

Investment projects by the government are not included, Jiang said.

The government will approve such investment projects in state security, utilization of land and water resources, environment protection and industrial layout, among others.

Other projects will get a green light just by being put on record, he said.

Wang Yongqing, vice director of the Office of Legal System, which is affiliated to the State Council, said the reform is far-reaching as it suggests a limit to government functions.

"The government can't administer each and every thing. Government administration should be rule-oriented rather than power-oriented," he told the Hong Kong newspaper Wen Wei Po.

"The government operation should be transparent, highly efficient and convenient for people," Wang added.

(Shanghai Daily January 2, 2004)