In a letter of request to the country's top legislature in May 2015, the China Construction Industry Association claimed a regulation promulgated by Beijing, Shandong province and other regions in recent years goes beyond the scope of local legislative authority and should be repealed.

The regulation stipulating that the settlement of expenses for all construction projects should be made only after the auditing of the projects is against the rights of the construction companies, the association said.

On the surface, such an administrative regulation adds to the quality and safety of projects, but it is essentially in breach of the principle of "equality and voluntariness" enshrined in the Contract Law. With such a regulation, the investors in construction projects sometimes deliberately delay paying construction enterprises the expenses, aggravating the latter's financial burden.

Given that the Contract Law is superior to local administrative stipulations, any time when there is a conflict between the two, the latter should be scrutinized and corrected by the legislative organ.

The legislative scrutiny over the controversial administrative regulation by the Standing Committee of the National People's Congress and its urging the regulation be abolished marks a necessary step toward breaking the institutional barriers resulting from the making of local administrative ordinances, and will help rebuild market rules and promote the healthy operation of the market.

The NPC's move also means the legislative scrutiny authority bestowed on it is being activated. According to the country's legislation and supervision laws and relevant stipulations, local administrative stipulations should be reported to the NPC Standing Committee for the record and revoked if any of them contravenes the country's Constitution and laws. In the country's entire supervisory system, the NPC is empowered to correct or repeal any administrative or local regulations that overstep the boundary of authorized power.