By Ma Xiaobai, DRC

2017-7-12

Business environment is like the soil for enterprise development, having a direct impact on a region’s economic prosperity. It has significant effects on small and medium-sized enterprises, giving expression to various aspects, including economic growth, financial income and social employment. The annual “Business Environment Report” issued by the World Bank is an important benchmark to measure business environment, which can provide useful reference for policymakers and also have a major impact on global investors’ input, so it merits our great attention.

China’s business environment has made swift improvement, but does not match its economic status. The World Bank chose Beijing and Shanghai, China’s two economically most developed cities, to conduct a research. According to the one-year research results, China ranks 78th among the 190 surveyed economies. Overall, China’s business environment moves up quickly in the world rankings in recent years, up by 18 places from 2013 to 2016. However, China’s business environment still ranks the middle level and it does not match its status as the world’s second largest economy, or with its goal of playing a greater role in the global economic development.

With regard to the evaluation index, some prominent problems could be found in China’s business environment. Although the performance of contract enforcement, property registration and a few other indicators is up to the standard, there are still some other problems. For instance, the management of construction permit is poor, prominent taxpaying problems remain to be addressed, the procedures for reviewing and approving business startups need to be streamlined, supportive measures for the protection of SME investors’ interests need to be fleshed out, it is difficult to obtain electricity supply and the increase of cross-border trade is still a hard nut to crack.

Following are some suggestions for the improvement of China’s business environment and its enhancement in international ranking. First, we need to carry out reforms first in Beijing and Shanghai and strive to raise their places in the ranking list. Second, we need to formulate plans to gradually improve China’s business environment with short-term and long-term measures. Third, we need to popularize the advanced experience and accelerate the pace of administrative reform. Fourth, we need to establish a regional business environment evaluation system in light of China’s business performance.