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China's leading legislators decided on Friday that the nation's lawmakers will discuss a draft law on administrative licensing later this month.

The Standing Committee of the 10th National People's Congress (NPC) will have a fourth round of deliberations on the draft law during their latest session from August 22 to 27 in Beijing, at which they are expected to pass the legislation.

This decision was made at Friday's meeting of the chairman and vice-chairpersons of the NPC Standing Committee, presided over by Wu Bangguo, the committee chairman.

Administrative licensing, referring to formal legal permission to conduct business or business-related activities, is a major governmental function, said Yu An, a professor of administrative law at Tsinghua University Law School.

"It will become a revolutionary act if the legislators passed the draft law,'' Yu said, adding that the law will play a critical role in the connection between domestic and international market as well as the unification of the domestic market.

He said the draft law will clearly define the relations between the government and the market mainly in the economic field and set procedures for the establishment of administrative licensing.

The draft law will offer comprehensive principles and procedures on how to conduct administrative licensing.

Currently, such administrative permission is regulated by scattered laws and regulations.

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

There are some 4,100 items that require licensing in this country, according to sources with the Legal Affairs Commission of the NPC Standing Committee.

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

Overelaborate procedures, poor efficiency, and underground, unfair or imprecise conditions for granting licences also stand out, he added.

The State Council began a nationwide campaign to rectify the situation in year of 2001, some 1,200 licensable items are expected to be axed.

The draft law, if passed, will consolidate the fruit of this campaign, Yu said.

Yu, a scholar who has participated in the drafting, said the draft law has also followed international practice and embody rules that are consistent with the requirements of the World Trade Organization such as transparency, protection of individuals and avoidance of making administrative permission trade barriers.

The lawmakers will also discuss amendments to the central bank law and commercial bank law as well as a draft law on the supervision and management of banking businesses when they meet.

These are viewed as legal foundation for China's reform of the financial and banking regulatory system, safeguarding the secure, steady and efficient operation of banks and financial institutions.

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