Local governments in China will have to explain any fines on companies if their total rises by more than 20 per cent year on year.
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The order from Beijing is part of central government efforts to stamp out illegal investigations and profit-seeking targeting private enterprises.
It is also part of the government’s latest economic recovery efforts that kicked off in March.
The order targets four major issues: arbitrary fines and inspections; unlawful enforcement and profit-driven behaviour; inconsistent enforcement standards that burden enterprises; and abuse of power.
“These problems are widespread and extremely harmful, and they are the ones that enterprises complain about the most,” said Hu Weilie, China’s vice-minister of justice, on Thursday. “The success of this special campaign hinges on whether these issues can be truly corrected.”
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The Justice Ministry’s initiative involves real-time nationwide statistical analysis of enforcement activity, with emphasis on detecting unusual increases in punitive fees.
