China is among the economies with the most notable improvement in business climate, according to an annual report released by the World Bank Group on Thursday, which compares business regulation in 190 countries and regions.
“Doing Business acknowledges the 10 economies that improved the most on the ease of doing business after implementing regulatory reforms,” the World Bank Group said in the report. “In Doing Business 2020, the 10 top improvers are Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, India and Nigeria.”
The 149-page report noted that Doing Business analyzes regulation that encourages efficiency and supports freedom to do business. It documents reforms implemented in 10 areas of business activity in 190 economies over a 12-month period ending on May 1, the World Bank said in a press release.
The 10 areas measured include starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
China scored 77.9 and ranked 31st among the 190 economies in ease of business ranking.
The top 10 improvers implemented a total of 59 regulatory reforms in 2018-19, accounting for one-fifth of all the reforms recorded worldwide. Their efforts focused primarily on the areas of starting a business, dealing with construction permits and trading across borders, according to the report.
“Governments can foster market-oriented development and broad-based growth by creating rules that help businesses launch, hire and expand,” World Bank Group President David Malpass said. “Removing barriers facing entrepreneurs generates better jobs, more tax revenues and higher incomes, all of which are necessary to reduce poverty and raise living standards.”
Bahrain implemented the highest number of regulatory reforms (nine), improving in almost every area measured by Doing Business. China and Saudi Arabia follow Bahrain with eight reforms each, according to the report.
It said China made starting a business easier by fully integrating obtaining company seals into a one-stop experience.
It also said China made exporting and importing easier by implementing advance cargo declaration, upgrading port infrastructure, optimizing customs administration and publishing fee schedules.
In particular, the report said China has implemented business tax reforms consistently over the years, with notable results.
In Doing Business 2006, for example, businesses in Shanghai spent 832 hours per year on average to prepare, file and pay taxes, and they had to make 37 payments. The latest edition of Doing Business showed that these metrics have been reduced to just 138 hours per year and seven payments.
It said Chinese leaders adopted the Doing Business indicators as a core component of the country’s reform strategies. The use of Doing Business as a benchmark aligns with the central government’s ambition to improve the competitiveness of the Chinese economy, it added.
“In recent years China has shown eagerness to reform in the areas captured by Doing Business,” it said.
Chinese Premier Li Keqiang’s March 2018 Report on the Work of the Government set the stage for provincial and municipal governments to implement a reform agenda, according to the report.
“The Chinese government also created working groups targeting each of the Doing Business indicators. To date, China has shown a notable improvement in the areas of dealing with construction permits, getting electricity and resolving insolvency,” the report noted.
Worldwide, 115 economies made it easier to do business, it said.
Doing Business 2020 is the 17th in a series of annual studies investigating the regulations that enhance business activity and those that constrain it.