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Doing Business in China 2008: Cities Nationwide Are Introducing Reforms

April 22, 2008

Beijing, April 22, 2008 – IFC, a member of the World Bank Group, in partnership with the Institute of Finance and Trade Economics of the Chinese Academy of Social Sciences, today launched the first Doing Business in China report in Beijing. The report compares the ease of operating a private business in 30 Chinese cities. It shows that local governments throughout China are promoting reform of the business regulatory environment and making it easier for the private sector to grow.

Doing Business in China 2008 finds significant variations, but innovations are underway in all regions of the country.  Although cities in the coastal and southern regions have implemented more extensive reforms, there are also top reformers in the western region, where Chongqing and Chengdu have piloted a number of economic initiatives.  Overall some 53 reforms were introduced from 2006 to early 2007.  Localities that have made it easier to do business have been successful in attracting new domestic and foreign investment.

“The report shows that there are many opportunities for Chinese cities to improve the investment climate. And they can find examples of effective reforms right here in China, in addition to practices from outside,” said Penelope Brook, Director for Doing Business at the World Bank Group. Michael Ipson, IFC Country Manager for China and Mongolia, added, “Doing Business in China allows municipalities to identify opportunities for even faster progress. IFC will help implement best practices to accelerate private sector development and improve the lives of local residents.”

“The report is a valuable reference for policymakers,” commented Chen Jiagui, Vice President of the Chinese Academy of Social Sciences. “It provides information on the ease of doing business across China that will help local governments learn international best practices for designing and implementing reforms.”  Pei Changhong, Director of the Institute of Finance and Trade Economics of the Chinese Academy of Social Sciences, added, "By using the World Bank Group's global methodology, we can compare results within China and internationally.”

Variation in the business environment reflects the degree of local government efficiency and innovation in implementing national laws and regulations.  Doing Business in China suggests that there is significant scope for localities to adopt practices already underway in other Chinese cities.  If these best practices were combined throughout China, the country’s global ranking on the ease of doing business would rise from 83 to 67.

Doing Business in China 2008 shows how government regulations facilitate or constrain business activity in 30 major cities. It measures four key indicators: starting a business, registering property, getting credit (creating and registering collateral), and enforcing contracts. While these indicators are not a full reflection of the local investment climate, they give cities a benchmark on which to build and demonstrate reforms.

China is the top reformer in East Asia and among the top 10 globally according to Doing Business 2008, the World Bank Group’s annual study of the ease of doing business in 178 economies. Doing Business in China 2008 was produced by IFC in partnership with the Institute of Finance and Trade Economics of the Chinese Academy of Social Sciences, a leading academic research organization and an important policy advisory body in China.

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