Business Environment Snapshot for China - Highlights

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Region: East Asia & Pacific
Income category: Lower middle income
Population: 1,325,639,981
GNI per capita (US$): 2774.88

Below are select highlights for the data included in the profile.

China's economic freedom score is essentially unchanged from last year, according to the Index of Economic Freedom. The World Bank Group's Control of Corruption ranking improved, and so did the Country Credit ranking.
The Economist Intelligence Unit has revised up its forecast for Chinese real GDP growth in 2009 to 7.8%, reflecting the rapid deployment of the government's $586 billion economic stimulus package and the massive increase in bank lending.
China's overall Ease of Doing Business ranking slipped this year reflecting lower ranking in 5 indicators. In the Trading Across Borders indicator, the ranking is lower this year, mainly due to the increase in cost to export per container from $460 to $500. China also relaxed restrictions on foreign exchange prepayments for exporters and deferred payments for importers, making it easier for smaller companies to trade. The country remains nearly at the bottom in Dealing with Construction Permits indicator. It takes 336 days and 37 procedures to obtain a construction permit which is twice the regional average.

View global rankings on the business environment. See the underlying scores, the trend indicator, and a radar chart with regional and income group comparisons.

View Comparison Chart

#	Indicator	Rank				Scale	Score							Trend over past year¹
#	Indicator	2009	2008	2007	2006	Scale	2009	2008	2007	2006	2005	2004	2003	Trend over past year¹
1	Business Environment Index EIU - Global Outlook Report		58 (82)	58 (82)	57 (82)	1-10		5.7	5.6	5.6	5.6	5.3	5.3
2	Control of Corruption Indicator World Bank Group		118 (202)	137 (201)	121 (201)	-2.5-2.5		-0.4	-0.7	-0.5	-0.7	-0.6	-0.5
3	Regulatory Quality World Bank Group		108 (202)	107 (200)	115 (200)	-2.5-2.5		-0.2	-0.2	-0.3	-0.3	-0.3	-0.4
4	Country Credit Rating Institutional Investor	33 (178)	34 (174)	34 (174)	36 (173)	0-100	75.4	76.5	73.9	69.8	66.0	63.4	60.0
5	Index of Economic Freedom The Heritage Foundation and the Wall Street Journal	132 (179)	123 (157)	133 (157)	117 (157)	0-100	53.2	53.1	52.0	53.6	53.7	52.5	52.6
6	Political Risk Rating (ICRG) PRS Group	67 (140)	60 (140)	72 (140)	63 (140)	0-100	67.5	70.0	67.0	69.5	68.5	70.0	66.0
7	Doing Business Ranking World Bank Group	89 (183)	86 (183)			1-183²
8	Quality of National Business Environment Ranking World Economic Forum - Global Competitiveness Report			57 (127)	58 (111)	1-127²

View Comparison Chart

Notes:

Please Note: As each of these rankings is collected and published on a different schedule, we associate the data with the year it was published. For Doing Business, the data is also associated for the year it was published (not the year of the report). For example, the data for 2007 was published in 2007 (yet from the Doing Business 2008 report).

¹An up/down rating requires a change within the last 2 years with available data of at least 1%
²These two sources only provide rankings, not an underlying score. We do not report trends for these two, as trends on rankings cannot be compared with the trends on scores.

View more detailed data from Doing Business and the Enterprise Surveys, two flagship data products of the World Bank Group focusing on private sector development. View key economic and private sector development indicators.

Doing Business

[Click to expand/collapse]

Source: Doing Business Website

Ease of...	2009 rank	2008 rank	Change in rank
Doing Business	89	86	-3
Starting a Business	151	152	1
Dealing with Construction Permits	180	178	-2
Employing Workers	140	139	-1
Registering Property	32	30	-2
Getting Credit	61	59	-2
Protecting Investors	93	88	-5
Paying Taxes	125	135	10
Trading Across Borders	44	49	5
Enforcing Contracts	18	18	0
Closing a Business	65	65	0

Three Well Performing Indicators	Percentile Rank¹	Indicator Value²	Compare with Income Group Average	Compare with Region Average
Getting Credit: Private bureau coverage (% of adults)	99.5	0.0	28.1	42.7
Trading Across Borders: Cost to export (US$ per container)	98.4	500.0	1218.6	897.9
Trading Across Borders: Cost to import (US$ per container)	98.4	545.0	1398.5	951.8

Three Potential Indicators for Reform	Percentile Rank¹	Indicator Value²	Compare with Income Group Average	Compare with Region Average
Dealing with Licenses: Procedures (number)	2.2	37.0	18.7	18.9
Getting Credit: Public registry coverage (% of adults)	0.5	62.1	12.8	32.1
Paying Taxes: Labor tax and contributions (%)	0.0	68.0	17.1	12.1

¹A percentile rank of 1 reflects a country ranked for that variable in the bottom 1 % of countries. Conversely, a percentile rank of 100 reflects a country ranked for that variable in the top 1% of countries.
²The value shown in this column is the specific value for the indicator. For example, if there is a value of 9.8 for Starting a Business: Duration (Days), that means that for the particular country it takes 9.8 days to Start a Business.

See Full Indicator List

Enterprise Surveys

[Click to expand/collapse]

Source: Enterprise Surveys Website

Senior Management Time Spent in Dealing with Requirements of Government Regulation (%)

% of Firms Expected to Pay Informal Payment (to get things done)

% of Firms Using Banks to Finance Investments

% of Firms With ISO certification ownership (%)

Time spent in meetings with tax officials (days)

Average Time to Clear Direct Exports Through Customs (days)

Note: These graphs compare the relevant country to the best and worst countries within the region and the world.

Time Series Data

[Click to expand/collapse]

Source: WDI, ILO, S&P

	2002	2003	2004	2005	2006	2007	2008
Macro Indicators
GDP growth (annual %)	9.1	10.0	10.1	10.4	11.6	13.0
Inflation, consumer prices (annual %)	-0.8	1.2	3.9	1.8	1.5	4.8
Total Returns Index (IFCGTRUS)	130.5	131.9	175.2	152.9	192.1
Financial & Private Sector Development Indicators
FDI Net Inflows (% of GDP)	3.4	2.9	2.8	3.5	2.9	4.3
Gross Fixed Capital Formation, private sector (% of GDP)	10.5	10.1	9.1	7.8	6.6
Tax revenue (% of GDP)	8.5	8.5	8.9	8.7	9.4
Exports of goods and services (% of GDP)	25.1	29.6	34.0	37.3	39.9	41.9
Imports of goods and services (% of GDP)	22.6	27.4	31.4	31.7	32.1	32.3
Domestic credit to private sector (% of GDP)		127.2	120.1	114.3	113.0	111.0	108.3
Domestic credit to private sector (% of total domestic credit)		83.7	85.6	84.4	83.0	84.1	85.8
Total Financial System Deposits to GDP	141.4	153.1	44.1	43.6	43.2	43.2
Bank nonperfoming loans to total (%)	25.6	20.1	15.6	10.5	7.5	6.7
Lending Spread	3.3	3.3	3.3	3.3	3.6	3.3
Private Sector Employment as a % of Total Employment
Business Entry Rate (new registrations as % of total)

View projects associated with the World Bank Group's Finance and Private Sector Development unit. View brief summaries of the private sector strategy as stated in the most recent Country Assistance Strategy (CAS) document.

China Country Assistance Strategy (CAS) PSD focus:
(May 2006)

PSD Strategy:

Improving the business environment and strengthening regulatory capacity - The Bank Group will continue its analytical work in such areas as the investment climate, enterprise and public sector governance. The Bank Group will also help to strengthen the GoC’s regulatory capacity to respond to market liberalization and integration with the global economy;
Access to markets - The Bank Group help private enterprises to enter new sectors of the economy. IBRD will pursue this objective through providing TA to improve regulations and entry conditions in sectors such as infrastructure. IFC will support investment by private companies. In addition, MIGA guarantees can help private enterprises to attract foreign investments in these new industries where political risks may exist;
Upgrading corporate practices - IBRD and IFC will support improvements in corporate governance practices through investments (IFC) and by helping to create the knowledge and institutional capacity for: (i) strengthening listing requirements on the Shanghai and Shenzhen stock exchanges; (ii) and assisting large enterprises in adopting and implementing codes of corporate social responsibility;
Access to finance and financial sector development - Given the critical importance of financial sector reform and development for the sustainability of China’s growth, support to financial sector reform will be an important area of focus for the World Bank Group. IBRD’s intervention will be mainly through AAA work, while IFC’s instruments will combine investments in private financial institutions with TA to improve corporate governance and risk management practices;
Environmental sustainability and energy efficiency;
Private participation in infrastructure;
Addressing regional imbalances.

World Bank [Click to expand/collapse]
Project		Total Project Amount (US $ millions)	Contact
Name:	Micro and Small Enterprise Finance Project	100.00	Chen,Nancy
ID:	P096285
Open/Close:	6/19/2007
Status:	Active
Name:	Accounting Reform & Development Project	33.00	Chen,Nancy
ID:	P051856
Open/Close:	2/23/1999
Status:	Active
Name:	Establishing a Professional Association of Government Financial Managers	0.00	Chen,Nancy
ID:	P088012
Open/Close:	8/10/2004 - 8/31/2006
Status:	Closed
Name:	ASEM - Chinese Securities Regulatory Commission Project	0.00	Zhang,Wei
ID:	P077796
Open/Close:	5/29/2002 - 8/31/2006
Status:	Closed
IFC [Click to expand/collapse]
Project		Total Project Amount (US $ millions)	Contact
Name:	TA to Renshou VTB	0.78	Lin Huang
ID:	570087
Open/Close:	7/8/2009
Status:	Active
Name:	Carbon Finance Aggregation through FIs - CHINA COMPONENT	1.13	Cunfeng Dai
ID:	564927
Open/Close:	3/2/2009
Status:	Active
Name:	China Microfinance Advisory Program	3.20	Jintang Jiang
ID:	567647
Open/Close:	1/30/2009
Status:	Active
Name:	Sichuan CCBs TA	0.46	Lin Huang
ID:	565612
Open/Close:	11/1/2008
Status:	Active
Name:	EMERGENCY ASSISTANCE PROGRAM TO SICHUAN	1.00	Wei Lei
ID:	564667
Open/Close:	9/16/2008
Status:	Active
Name:	Chengdu CGC Technical Assistance Phase III	0.20	Zhifang Luo
ID:	565607
Open/Close:	8/20/2008
Status:	Active
Name:	TA to MC Nanchong	1.10	Jintang Jiang
ID:	558826
Open/Close:	6/1/2008
Status:	Active
Name:	TA to Zhong an	0.85	Lin Huang
ID:	560605
Open/Close:	1/1/2008
Status:	Active
Name:	VET China - Phase Two	0.08	Svava Lee Bjarnason
ID:	550685
Open/Close:	10/20/2007
Status:	Active
Name:	Investee FI BRCB TA	0.78	Zhifang Luo
ID:	556666
Open/Close:	10/15/2007
Status:	Active
Name:	IF-China Personal Bankruptcy Law Project	0.44	Mingyu Ma
ID:	561106
Open/Close:	9/20/2007
Status:	Active
Name:	China Housing Finance Advisory Program	0.70	Mingyu Ma
ID:	550907
Open/Close:	5/31/2007
Status:	Active
Name:	TA to NCCB Small Business Lending	0.65	Jintang Jiang
ID:	551926
Open/Close:	4/1/2007
Status:	Active
Name:	China Microfinance Pilots	0.62	Lin Huang
ID:	548525
Open/Close:	10/20/2006
Status:	Active
Name:	Investee FI URCB TA	1.41	Zhifang Luo
ID:	544224
Open/Close:	7/22/2006
Status:	Active
Name:	CCBs Capacity Building	1.45	Zhifang Luo
ID:	545084
Open/Close:	7/20/2006
Status:	Active
Name:	MOFCOM - China. IP-Support for lesser-developed regions.	0.52	Kuang Shen Gu
ID:	543984
Open/Close:	12/1/2005
Status:	Active
Name:	Access to Business Credit - Secured Transactions -CHINA	1.22	Alejandro S. Alvarez de la Campa
ID:	539924
Open/Close:	10/1/2005
Status:	Active
Name:	Chengdu CGC Technical Assistance II	0.16	Zhifang Luo
ID:	523321
Open/Close:	2/19/2005
Status:	Active
Name:	Leasing - China	0.64	Mingyu Ma
ID:	533464
Open/Close:	11/24/2004
Status:	Active
Name:	China Utility-Based Energy Efficiency Finance Program	9.36	Cunfeng Dai
ID:	523295
Open/Close:	3/30/2004
Status:	Active
Name:	Technical Assistance Programme for Leshan City Commercial Bank	0.26	Jintang Jiang
ID:	522590
Open/Close:	1/24/2004
Status:	Active
Name:	Secured Transactions Reform	1.02	Mingyu Ma
ID:	521957
Open/Close:	1/1/2004
Status:	Active
Name:	Comparative Study of the Development of the IT Industry in China and India- Manufacturing or Service	0.33	Stoyan Tenev
ID:	521898
Open/Close:	8/21/2003
Status:	Active
Name:	Credit reporting system Development in China	0.25	Lin Huang
ID:	521645
Open/Close:	7/1/2003
Status:	Active
Name:	Sichuan Recovery Investment Promotion Component	0.14	Josephine M. Bassinette
ID:	566267
Open/Close:	11/3/2008 - 6/30/2009
Status:	Closed
Name:	Study on Private Sector Financing and External Borrowing in China	0.11	Lin Huang
ID:	555067
Open/Close:	2/1/2007 - 12/31/2009
Status:	Closed
Name:	China Subnatl DB	0.25	Lihong Wang
ID:	552007
Open/Close:	12/11/2006 - 9/30/2008
Status:	Closed
Name:	Tourism Development in Sichuan: A Value Chain Approach	0.25	Xiaolun Sun
ID:	545504
Open/Close:	4/1/2006 - 12/31/2007
Status:	Closed
Name:	Sichuan Cluster Development	0.13	Lin Huang
ID:	540303
Open/Close:	2/1/2006 - 12/30/2008
Status:	Closed
Name:	Sichuan Value Chain Analysis - CPDF/FIAS/SME Dept. joint project	0.31	Xiaofang Shen
ID:	541484
Open/Close:	1/6/2006 - 7/31/2007
Status:	Closed
Name:	PSD Study-Quality and Sustainability Performance of Private Enterprise	0.38	Lin Huang
ID:	539386
Open/Close:	11/1/2005 - 12/30/2008
Status:	Closed
Name:	The Development of a VET Framework for China - The Role of the Private Sector	0.23	Timothy R. Ryan
ID:	537924
Open/Close:	10/31/2005 - 6/30/2008
Status:	Closed
Name:	SME Access to Finance	0.16	Lin Huang
ID:	538700
Open/Close:	8/6/2005 - 6/30/2008
Status:	Closed
Name:	Strengthening of Lotus Corporate Governance and Retail and SME Finance	0.14	Weichuan Xu
ID:	522549
Open/Close:	3/1/2004 - 12/1/2008
Status:	Closed
Name:	Credit Analysis Workbook	0.12	Wei Lei
ID:	523658
Open/Close:	1/1/2004 - 6/30/2009
Status:	Closed
Name:	Capacity Building of SIPB	0.29	Lin Huang
ID:	521956
Open/Close:	9/13/2003 - 6/30/2008
Status:	Closed
Name:	Chengdu City Commercial Bank Asset & Liability Management /IAS Audit	0.24	Wei Lei
ID:	520557
Open/Close:	1/4/2003 - 7/4/2008
Status:	Closed

Title	Author/Contact	Source	Date
China Doing Business profile		Doing Business database	09/09
Criss-crossing globalization : uphill flows of skill-intensive goods and foreign direct investment	Mattoo, Aaditya, Arvind Subramanian	WPS 5047	09/09
China and central and eastern European countries : regional networks, global supply chain, or international competitors?	Fung , K.C., Iikka Korhonen, Ke Li, and Francis Ng	WPS 4689	08/08
Lessons from China for Africa	David Dollar	WPS 4531	02/08
Doing Business in China 2008			01/08
Formal versus informal finance : evidence from China	Ayyagari, Meghana, Asli Demirguc-Kunt, Vojislav Maksimovic	WPS 4465	01/08
Securing property rights in transition: lessons from implementation of China's rural land contracting law	Deininger, Klaus, Songqing Jin	WPS 4447	12/07
Foreign direct investment in Latin America during the emergence of China and India : stylized facts	Cravino, Javier, Daniel Lederman, Marcelo Olarreaga	WPS 4360	09/07
China Quarterly Update, September 2007			09/07
China Quarterly Update, May 2007			05/07
Does "good government" draw foreign capital ? Explaining China's exceptional foreign direct investment inflow	Yeung, Bernard, Lixin Colin Xu, Randall Morck, Joseph P.H. Fan	WPS 4206	04/07
Formal finance and trade credit during China's transition	Tian Zhu, Lixin Colin Xu, Robert Cull	WPS 4204	04/07
The international financial integration of China and India	Schmukler, Sergio L., Philip R. Lane	WPS 4132	02/07
China - Governance, investment climate, and harmonious society : competitiveness enhancement for 120 cities in China			10/06
CPDF monthly newsflash no. 33			10/06
CPDF monthly newsflash no. 32			07/06
China - Country partnership strategy			05/06
CPDF monthly newsflash no. 31			04/06
Snapshot Sichuan : benchmarking FDI competitiveness in China's Sichuan Province			03/06
CPDF monthly newsflash no. 30			01/06
Two decades of reform : the changing organization dynamics of Chinese industrial firms	Nabeshima, Kaoru, Shahid Yusuf	WPS 3806	01/06
CPDF monthly newsflash no. 29			12/05
Measuring the Impact of the Investment Climate on Total Factor Productivity: the cases of China and Brazil	Subramanian, Uma, William P. Anderson, and Kihoon Lee	Policy Research Working Paper 3792	12/05
Under new ownership: privatizing China's state-owned enterprises	Perkins, Dwight H., Kaoru Nabeshima, Shahid Yusuf		12/05
CPDF monthly newsflash no. 27			08/05
CPDF monthly newsflash no. 26			06/05
CPDF monthly newsflash no. 25			04/05
Step by step corporate governance models in China - the experience of the International Finance Corporation			04/05
Trade costs and location of foreign firms in China	Javorcik, Beata Smarzynska, Mary Amiti	WPS 3564	04/05
Are foreign investors attracted to weak environmental regulations? Evaluating the evidence from China	Wang, Hua, Mary E. Lovely, Judith M. Dean	WPS 3505	02/05
CPDF monthly newsflash no. 24			02/05
Duty drawbacks, competitiveness, and growth - are duty drawbacks worth the hassle?	Ianchovichina, Elena	WPS 3498	02/05
China : IFC country impact review		OEG findings. -- No. 2 (2005)	01/05
China: an evaluation of World Bank Assistance			01/05
Evaluation of the World Bank's contribution to Chinese enterprise reform	Nolan, Peter	Operations Evaluation Department (OED) working paper series	01/05
CPDF monthly newsflash no. 23			12/04
Steering a steady course - special focus : strengthening the investment climate in East Asia		East Asia Update	11/04
CPDF monthly newsflash no. 21			10/04
CPDF monthly newsflash no. 20			09/04
Incubating women's businesses - what works ?	Ellis, Amanda [editor]	PSD Gender notes. - - Volume 2, issue no. 2 (September 2004).	09/04
CPDF monthly newsflash no. 19			08/04
CPDF monthly newsflash no. 18			07/04
CPDF monthly newsflash no. 17			06/04
Investment Climate and International Integration	Dollar, David, Mary Hallward-Driemeier, and Taye Mengistae		06/04
CPDF monthly newsflash no. 16			05/04
IFAD's assistance to the rural finance sector reform in China	Htenas, Aira Maria, Thomas Rath, Erik Martens		05/04
CPDF monthly newsflash no. 15			04/04
Policy reform on investment climate: case analysis of Hangzhou	Yu, Yao, Sheng Lei, Pu Yufei		03/04
CPDF monthly newsflash no. 14			03/04
CPDF monthly newsflash no. 13			01/04
Improving city competitiveness through the investment climate: ranking 23 Chinese cities	Xu, Lixin Colin, Shuilin Wang, Anqing Shi, David Dollar		12/03
CPDF monthly newsflash no. 12			11/03
CPDF monthly newsflash no. 11			10/03
CPDF monthly newsflash no. 10			09/03
China - Promoting growth with equity : country economic memorandum			09/03
Management of China's state-owned enterprises portfolio: lessons from international experience	Zhang, Chunlin, William P. Mako		09/03
CPDF monthly newsflash no. 9			08/03
CPDF monthly newsflash no. 8			07/03
CPDF monthly newsflash no. 7			06/03
CPDF monthly newsflash no. 6			05/03
Financial intermediation and growth - Chinese style	Boyreau-Debray, Genevieve	WPS 3027	04/03
CPDF monthly newsflash no. 5			04/03
The investment climate and the firm : firm-level evidence from China	Lixin Colin Xu, Scott Wallsten, Mary Hallward-Driemeier	WPS 3003	03/03
CPDF monthly newsflash no. 4			03/03
CPDF monthly newsflash no. 3			02/03
CPDF monthly newsflash no. 2			01/03

Notes:

Doing Business

Enterprise Surveys

Time Series Data

Banking and Credit Laws (Getting Credit, Protecting Investors)

Bankruptcy and Collateral Laws (Closing a Business, Getting Credit - Legal Rights)

Civil Procedure Codes (Enforcing Contracts, Closing a Business, Protecting Investors)

Commercial and Company Laws (Starting a Business, Protecting Investors, Closing a Business)

Constitutions (Starting a Business, Employing Workers, Registering Property, Enforcing Contracts)

Labor Laws (Employing Workers)

Land and Building Laws (Dealing with Licenses, Registering Property)

Securities Laws (Protecting Investors)

Tax Laws (Paying Taxes)

Trade Laws (Trading Across Borders)