BEIJING, October 31, 2018 – China carried out a record number of reforms during the past year to improve the business climate for small and medium enterprises, earning the country a spot in this year’s top 10 global improvers, says the World Bank Group’s Doing Business 2019: Training for Reform report.
China implemented the largest number of reforms in the East Asia and Pacific region. As a result, China advanced to a global ranking of 46 this year, up from 78 last year.
“China has made rapid progress in improving its business climate for domestic small and medium enterprises in the past year. This progress, which now puts China among the top 50 economies in the world, signals the value the government places on nurturing entrepreneurship and private enterprise,” said Bert Hofman, World Bank Country Director for China.
Doing Business monitors two cities in China – Beijing and Shanghai. Highlights of the reforms from the past year are:
- Starting a Business was made easier through the introduction of online registration systems and simplifying social security registrations.
- Dealing with Construction Permits was made easier by streamlining the process of obtaining building permits and certificates of completion, as well as registering new buildings with the real estate registry. Building quality controls were also improved by introducing stricter qualification requirements for professionals in the construction industry and the improvement of public access to information.
- Getting Electricity was made easier by expanding network capacity and making the connection process free of charge. The introduction of a new mobile application for customers has also reduced the time to obtain an electricity connection to 34 days, from 143 days.
- Registering Property was made easier by streamlining administrative procedures and by increasing the reliability and transparency of the land administration system.
- Protection of minority investors was strengthened by increasing shareholders' rights and role in major corporate decisions, clarifying ownership and control structures and requiring reimbursement of legal expenses incurred by shareholders.
- Paying Taxes was made easier by abolishing the business tax, allowing for joint filing and payment of all stamp duties and by implementing several administrative reforms to lower the compliance time. Beijing also made paying taxes less costly by reducing the housing fund rate paid by the employer.
- The time and cost of Trading Across Borders was reduced by implementing a single window, eliminating administrative charges, increasing transparency and encouraging competition.
Progress made in the areas of Starting a Business and Getting Electricity are particularly impressive. Since last year, three procedures were removed and consequently it now takes 9 days to start a business, on par with most OECD high income countries. In addition, Beijing is now one of only two cities in the world where the process of starting a business is completely free. China is now ranked 28 in the area of Starting a Business.
Getting an electricity connection is also entirely free in China. Japan and the United Arab Emirates (UAE) are the only two other countries in the world to share this distinction. As a result, China has earned a global rank of 14 in the area of Getting Electricity.
Remarkable progress has also been made on almost all components of Trading Across Borders. For instance, the cost to import (border compliance) has been reduced to $326, from $745. As a result of this and other improvements, China has advanced over 30 places to a global rank of 65 in the Trading Across Borders area.
China also remains one of the best economies in the world to resolve a commercial dispute. It takes 496 days and costs 16 percent of the value of the claim; far better than the OECD high income average of 582 days and 21 percent. Globally, China is ranked 6 in this area.
Despite the progress made since last year, China can do better in the area of Dealing with Construction Permits, with a global rank of 121. A business needs to complete 20 procedures in order to obtain all permits and authorization to build a warehouse in China, compared with an average of 15 procedures in the East Asia and Pacific region. Nonetheless, with the latest progress made on the building quality control index, China already performs close to the standard established by OECD high income economies with a score of 11 out of 15.
The full report and its datasets are available at www.doingbusiness.org