Legislators are considering passing a law on electronic signatures to promote online business in China.

Members of the Standing Committee of the 10th National People's Congress (NPC) Tuesday held a third round of discussions on the draft law, which is expected to be put to a vote on Saturday.

Electronic signatures are data presented in electronic form that serve as a method of authentication, similar to the function of traditional handwritten signatures and seals.

A legal electronic signature should identify the signer and confirm file content.

The draft law grants electronic signatures the same legal standing as handwritten signatures and seals in business transactions.

But electronic signatures will not be eligible for documents concerning personal relations such as marriage, adoption and inheritance.

Nor will electronic signatures work in the transfer of property such as land and houses and the suspension of public utility services such as supply of water, heating, gas and electricity.

As a predominant means of ensuring the security of electronic transactions, online signatures have seen widespread application in recent years.

However, the absence of a law governing electronic signatures has undermined trust between online traders and thus greatly hindered the growth of China's e-commerce and e-government.

As Internet trade requires a reliable third party to identify the signers, the credibility of the online certification organizations is significant for transaction security.

The draft law requires the State Council to work out specific rules governing the certification authorities, the agencies that play a vital role in setting up electronic signatures.

It says the information technology authorities should tighten supervision over the certificate authorities to reduce the risk of illegal use or misuse of electronic signatures.

Statistics show that China has some 4,000 websites dealing with e-commerce and over 70 online certification centers. China's Internet Data Center estimates that domestic revenue from e-commerce amounted to US$60 billion in 2003.

Legislators yesterday also reviewed draft amendments to the laws on highways, corporations, securities, commercial instruments, auctions, wildlife conservation, fisheries and crop seeds as well as the regulation of academic degrees.

The draft amendments will cancel or change those clauses inconsistent with the Law on Administrative Licensing which took effect on July 1.

The law has greatly reduced the amount of administrative licensing, hazardous expansion of which seriously hampers China's efforts to build a market economy.

Overuse of licensing is widely attacked as a hotbed for corruption because it creates more opportunities for kickbacks during the approval process.

Since October 2002, the State Council has abolished or adjusted 1,795 items formerly subject to administrative approval, nearly half of the total handled by departments of the State Council.

(China Daily August 25, 2004)