PRESS RELEASE October 24, 2019

Doing Business 2020: China’s Strong Reform Agenda Places it in the Top 10 Improver List for the Second Consecutive Year

Reforms in 8 Areas

BEIJING, October 24, 2019 – China joined the ranks of the world’s top ten most improved economies for ease of doing business for the second year in a row thanks to a robust reform agenda, the World Bank Group’s Doing Business 2020 study says.

China carried out a record eight business reforms during the 12 months to May 1 and ranks 31st globally on the ease of doing business rankings with a score of 77.9 out of 100.

China has undertaken substantial efforts to improve the  domestic business climate for small and medium-size enterprises, maintaining an active pace of reforms,” said Martin Raiser, World Bank Country Director for China. “Laudable progress has been achieved on a number of Doing Business indicators, particularly in the area of construction permitting.”

Highlights of China’s reforms include:

  • Fully integrating issuance of company seals into a business registration one-stop shop.
  • Simplifying the building permits requirements for low-risk construction projects and reducing the time to get water and drainage connections.
  • Streamlining the process of obtaining an electrical connection and increasing the transparency of electricity tariff changes.
  • Strengthening the protection of minority investors by imposing liability on controlling shareholders for unfair related-party transactions and clarifying ownership and control structures.
  • Implementing a preferential corporate income tax rate for small enterprises, reducing the value added tax rate for certain industries and enhancing the electronic filing and payment system.
  • Simplifying exporting and importing by implementing advance cargo declaration, upgrading port infrastructure, optimizing customs administration and publishing fee schedules.
  • Making contract enforcement easier by regulating the maximum number of adjournments that can be granted and limiting adjournments to unforeseen and exceptional circumstances.
  • Making resolving insolvency easier by providing rules for post-commencement credit priority and increasing the participation of creditors in insolvency proceedings.

China made noteworthy improvements in the process of construction permitting, which helped the economy improve its global rank on this indicator. It now takes 111 days to undertake building permitting procedures in China, and the economy receives a perfect score of 15 in the quality index of the indicator, compared to the region’s average of 132 days and 9.4 points respectively.

China’s strengthening of minority investor protection mechanisms moved the economy to the 28th spot worldwide, above the regional average of 99th and the OECD high-income economies’ average of 46th.

China’s recent reforms secured the country’s place among the most efficient economies on contract enforcement. A local entrepreneur spends on average 496 days and 16.2% of the claim value to resolve a commercial dispute, faster and less expensive than the regional average. China improved the quality of judicial administration, and it now scores 17 out of 18 on this index. No economy in the world scores better.

Building on reforms last year, China now ranks 12th globally in getting electricity and performs significantly better than the rest of the region. Chinese businesses must complete two steps and spend 32 days to obtain a connection, half the regional averages of 4.2 procedures and 63 days.

While there has been substantial progress, China still lags in areas such as paying taxes (105), getting credit (80), and trading across borders (56). It takes 21 hours and costs US$ 256 when exporting to comply with the border requirements, longer and more expensive than among OECD high-income economies. And a Chinese company must spend an average of 138 hours per year complying with fiscal requirements, compared to 64 hours in Singapore.

The full study and its datasets are available at www.doingbusiness.org


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