China jumps 15 places to 31 in WB ranking for ease of doing business

Huang Yixuan
The country now ranks 31 on latest global list compiled by the World Bank, up from 46 last year. Major improvements were noted in terms of permits, electricity and insolvency.
Huang Yixuan

China is among the 10 economies where business climates improved the most, and it is on the list of top 10 improvers for a second consecutive year, according to the World Bank’s annual doing business study released yesterday.

China ranks 31 out of 190 countries and regions for ease of doing business, jumping from 46 last year and 78 in 2017, making it one of the most improved economies in terms of doing business, the report said.

In recent years, China has shown considerable willingness to reform in areas captured by the bank’s Doing Business report. Chinese Premier Li Keqiang’s March 2018 “Report on the Work of the Government” set the stage for municipal governments to implement a business reform agenda.

The use of Doing Business as a benchmark aligns with the central government’s ambition to improve the competitiveness of the Chinese economy. 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 said.

For instance, China made obtaining building permits easier by simplifying the requirements for low-risk construction projects and by reducing the time to get water and drainage connections, and also made construction safer by imposing stricter qualification requirements for professionals in charge of technical inspections and verifying architectural plans as well as differentiated building quality supervision schemes.

Getting electricity has become easier after the country streamlined the application process, and the transparency of electricity tariff changes has been increased.

Meanwhile, China has implemented business tax reforms consistently over the years, with notable results, the report said.

In 2014, China integrated taxpayer services functions through a mobile tax application and launched official accounts on the two main Chinese social media platforms (WeChat and Weibo). In 2015, the Internet+Taxation Initiative unlocked the potential of big data for taxpayer services, such as data sharing among government bodies, online training, and e-invoices. The State Taxation Administration launched the Golden Tax III system in 2017, which facilitated e-filing of different stamp duty taxes. Additionally, China implemented a series of measures in the past two years, which simplified corporate income tax, labor taxes, value added tax declarations, and e-delivery of invoices.

The bank’s calculations gave Shanghai a weighting of 55 percent and Beijing 45 percent.

Shanghai has made further progress in improving its business environment.

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. By Doing Business 2020, these metrics have been reduced to just 138 hours per year and seven payments.

Looking at various indicators, Shanghai has seen its global rankings edging higher for most indicators in the bank’s global assessment. For instance, the city ranks 27 for the indicator of “starting a business,” up one place from last year.

Previously, in order to start and operate a new business, five licenses were required, the Business License, the Organization Code Certification, the Tax registration, the Statistics Registration and the Social Welfare Insurance Registration. These have been combined into one license.

In terms of dealing with construction permits, the city’s ranking advanced sharply by 88 places to the 33rd, after Shanghai launched an integrated service system for the joint examination and approval of construction projects, as well as an offline examination and approval center to deal with the applications.

The city also climbed up 2 places to rank 12 in getting electricity, up 9 places to 56 in trading across border, up 9 places to rank 105 for the indicator of paying taxes, and up one place to rank fifth in enforcing contracts. 

China jumps 15 places to 31 in WB ranking for ease of doing business
Shen Xinyi / SHINE
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