Beijing, China, September 10, 2008— Regulatory reforms are gaining momentum worldwide, reaching record numbers this year, finds Doing Business 2009—the sixth in a series of annual reports published by IFC and the World Bank. According to the report, China introduced important reforms between June 2007 and June 2008 that made it easier to obtain credit, pay taxes and enforce contracts. The country's global ranking on the ease of doing business rose to 83 from 90.
China introduced a new property law in October 2007 that made obtaining credit easier by expanding the range of assets used as collateral to include accounts receivables. China also reduced the tax burden on businesses by cutting the corporate income tax and the time spent on paying taxes. Contract enforcement was strengthened.
"Economies need rules that are efficient, easy to use, and accessible to all who have to use them. Otherwise, businesses get trapped in the unregulated, informal economy, where they have less access to finance and hire fewer workers, and where workers lack the protection of labor law," said Michael Klein, World Bank/IFC Vice President for Financial and Private Sector Development. "Doing Business encourages good rules, and good rules are a better basis for healthy business than who you know," he added.
Dahlia Khalifa, a coauthor of the report, said, "Countries in the region are clearly committed to reform agendas. Regardless of their stage of economic development, they are recognizing the role that regulatory reform can play in staying competitive, while boosting entrepreneurship and creating jobs."
Globally, Singapore leads the rankings on the overall regulatory ease of doing business for a third consecutive year. New Zealand is runner-up, and the United States is in third place. Other high-ranking countries and territories in East Asia and the Pacific are Hong Kong Special Administrative Region of the People's Republic of China, Japan, Thailand, Malaysia, and South Korea.
Doing Business 2009 ranks 181 economies on the overall ease of doing business based on 10 indicators of business regulation that track the time and cost to meet government requirements in starting and operating a business, trading across borders, paying taxes, and closing a business. The rankings do not reflect such areas as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates.
The Doing Business project is based on the efforts of more than 6,700 local experts—business consultants, lawyers, accountants, and government officials—and leading academics around the world who provided methodological support and review.