China has been ranked the fourth-best reformer in terms of the ease of doing business in 175 economies, following Georgia, Romania and Mexico.

The World Bank and the International Finance Corporation (IFC), the private sector arm of the World Bank Group, which produced the ranking, praised the nation for speeding up economic reform.

"China has picked up the pace of its reforms, like speeding business entry, increasing investor protections and reducing red tape in cross-border trading, during the past year," Caralee McLiesh, an author of the report, said in a video conference yesterday.

The report Doing Business 2007: How to Reform said China had reduced the time taken to register a business from 48 to 35 days and cut the minimum capital required from 947 per cent to 213 per cent of income per capita, making it easier for entrepreneurs to start new businesses in the country.

China has also established a credit information registry for consumer loans, the report said. Now 340 million citizens have credit histories, improving their access to credit.

Meanwhile, amendments to the company law have strengthened investors' protection against insider trading and new online customs procedures have made trade easier by reducing the time it takes to import and export by two days, the report said.

"The recent adoption of the corporate bankruptcy law, though not included in the measurements for this year's report, is another indication that China is making significant reforms," said McLiesh.

The reforms helped China up 15 places from a year earlier in an overall ranking on the ease of doing business. The country now comes in 93rd in the overall ranking.

The ranking is based on 10 indicators: starting a business, dealing with licences, employing workers, registering property, enforcing contracts, getting credit, trading across borders, protecting investors, paying taxes and closing a business.

"China still has a long way to go to upgrade its ranking," said McLiesh.

She highlighted two areas the government needs to further improve to make doing businesses easier.

One is a further relaxation of regulations surrounding starting a business and licensing. Businessmen still need to complete 13 procedures and spend 15 days applying for a business licence.

And the new company law requires a minimum capital of 30,000 yuan (US$3,750), which is still quite expensive, as most countries do not have minimum capital requirement for start-ups.

The other is a simplification of the tax system. According to McLiesh, China's tax regime is relatively complex and not transparent. A unified, simple and transparent tax system would be easier for businesses to comply with. China is also relatively weak in investor protection and legal infrastructure.

In the report, Singapore was ranked as the easiest place to do business, followed by New Zealand and the United States.

The Hong Kong Special Administrative Region ranked fifth, up from sixth last year.

The report said Hong Kong has made reforms including improved investor protection through greater availability of company documents, simplified documentation and electronic filing of trade manifests. While more reforms are needed on property registration and dealing with licences, to provide a better business environment.