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China’s Doing Business Success: Drivers of Reform and Opportunities for the Future

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Main findings:

  • Over the past two years, China has moved from 78th position in Doing Business 2018 to 31st position in Doing Business 2020 and was included among the Top 10 fastest global reformers for two years in a row.
  • China’s reforms covered most of the ten Doing Business indicators, from starting a business to resolving insolvency. In some areas, such as enforcing contracts or getting electricity, China is now close to or at the forefront of the global best practice.
  • There were six key drivers of China’s success, including high-level leadership and ownership of the reform agenda, local policy experimentation, national and international knowledge sharing, strong enforcement of the reform agenda and accountability for results, robust private sector participation and intensive use of e-government services.
  • However, despite the recent progress, further efforts are needed to put China’s business environment at the global frontier, including in the regulatory areas covered by Doing Business and beyond.

Main recommendations:

  • Within the Doing Business framework, China should continue with reforms in several areas, including streamlining construction permitting and ensuring high-quality of building regulations and supervision, further improving trading across borders, putting in place regulations and infrastructure to facilitate getting credit and developing a world class framework and institutions for resolving insolvency, where it lags behind its global peers.
  • Continue replicating the reforms in Beijing and Shanghai across the whole country.
  • Beyond Doing Business, China should sustain the reform momentum and enhance public access to data,  strengthen the quantity and the quality of feedback from the private sector and further improve cross-agency coordination.
  • The authorities should also continue to tackle other challenges to the business environment, including strengthening the rule of law, promoting competition and ensuring a level-playing field for all companies, opening the remaining sectors of the economy and adopting international norms on the treatment of SOEs.