By Suwatchai Songwanich
CEO Bangkok Bank (China)
China’s efforts to cut red tape and overhaul outdated regulations have led to improvements in cross-border trade, electricity supply, paying taxes online and ease of doing business.
Doing Business 2018, a World Bank report issued at the end of October, endorsed China’s efforts to improve its business environment, in what one World Bank leader labelled a “remarkable” year for the country.
According to the bank, China usually achieves one or two regulatory reforms each year, but in 2018 has been able to achieve reform in seven areas, including the completion of many that had been in development for years.
These efforts pushed China into 46th place this year out of 190 countries, from 78th place last year, leapfrogging EU countries such as Italy, Romania and Greece.
In the same report Thailand’s score improved but its ranking dropped as other economies, including China, have implemented reforms much faster.
China’s progress puts it among the top 50 economies in the world, signalling the value the government is placing on nurturing entrepreneurship and supporting private enterprise.
The World Bank’s findings on doing business in China are supported by reports closer to home. In November, Chinese media reported the results of a survey conducted by the China Council for the Promotion of International Trade (CCPIT).
The Council found that nearly 90 per cent of 4,000 surveyed enterprises were satisfied with the business environment in China, scoring 4.17 out of 5, up from 3.85 in 2016.
The surveyed firms included state-owned, privately owned and foreign-owned companies across the country’s 25 provinces and regions. Enterprises in central areas, high-tech enterprises, and wholly foreign-owned enterprises responded with the highest scores.
The deepening distance between China and the US has cast a light on many of the frustrations foreign businesses feel in China, such as preferential treatment towards Chinese and state-owned companies, intellectual property violations and mandatory technology transfer.
Nevertheless, while a sustained focus still needs to be placed on fostering the business environment in China, these globally-recognised improvements in doing business can be seen as a positive for foreign companies.
For more columns in this series please visit www.bangkokbank.com.