Report: Business gets easier in China

Updated: 2013-10-29 23:53

By Yao Jing (China Daily)

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China has made steady progress in improving business regulations for local entrepreneurs in East Asia and the Pacific since 2005, a report released by World Bank Group said on Tuesday.

Doing Business 2014, the 11th in a series of annual reports benchmarking the regulations that affect private-sector firms across 189 economies, said China now ranks 13th among the top 50 economies for narrowing the distance to frontier the most since 2005.

The report analyzed regulations that apply to an economy's businesses during their life cycles, including startup and operations, trading across borders, paying taxes and resolving insolvency.

The report noted China's good practices in such sectors as construction permits, out-of-court settlements, approval processes and online procedures.

For example, China improved its credit information system by introducing industry regulations that guarantee a borrower's right to inspect his or her data.

China also has made enforcing contracts easier by amending its civil procedure code to speed up court proceedings.

Still, gaps remain between China and economies with regulations that are more business-friendly, the report said.

In rankings on the ease of doing business, China slumped five spots to No 96 and was placed behind the emerging African economies of Zambia and Rwanda.

"Governments play a crucial role in supporting a dynamic ecosystem for firms," said Sri Mulyani Indrawati, managing director at World Bank Group.

Without rules that are fairly enforced, entrepreneurs have trouble starting and growing the small and medium-size firms that are the engines of growth and job creation around the world, the report said.

AmCham China, which represents more than 1,000 member companies, released a report in September in which its member companies cited ambiguous, overlapping, conflicting and irregularly implemented regulations as a key challenge facing their China operations. Also cited were discriminatory policies that favor domestic companies over foreign firms.

The European Union Chamber of Commerce in China has called for a balance between government control and market forces for years.

But experts said China is on track for economic upgrading.

In general, the report counted 238 policy improvements, an increase of 18 percent from the previous year and the second-highest total since the recent financial crisis.

According to the World Bank Group report, Singapore and Hong Kong remain the two easiest places for small to medium-sized businesses to operate, and Malaysia achieved a top 10 ranking for the first time.

Economies that gained in the report included Russia, which climbed to 92nd from 112th a year ago, and Brazil, rising from 130th to 116th.