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Country Snapshot - China  

HighlightsRankingsQuantitative DataLegislationAnalytical WorkProject Portfolio
  • East Asia & Pacific
  • Lower middle income
  • 1,338,300,000 (2011)
  • 4,260
China Flag
Below are select highlights for the data included in the profile.

  1. China’s overall Doing Business ranking has slightly declined this year, reflecting lower scores for 7 indicators. According to the Doing Business 2011 Report, China’s new corporate income tax law unified the tax regimes for domestic and foreign enterprises and clarified the calculation of taxable income for corporate income tax purposes. As a result, the country jumped 10 spots in the Paying Taxes Indicator.
  2. China’s limits on foreign equity ownership are stricter compared to the countries covered by the Investing Across Sectors indicators in East Asia and the Pacific. The principal rules governing FDI are found in the Catalogue of Industries for Guiding Foreign Investment (amended in 2007), which lists specific sectors in which foreign investment is encouraged, restricted, or prohibited. It imposes restrictions on foreign equity ownership in the majority of the sectors covered by the Investing Across Sectors indicators, in particular the service industries.
  3. According to the 2011 Index of Economic Freedom, China’s score is 52, making its economy the 135th freest in the 2011 Index. Its overall score is one point higher than last year, reflecting small improvements in monetary freedom, investment freedom, and labor freedom that offset declining scores for trade freedom and government spending. China is ranked 29th out of 41 countries in the Asia-Pacific region, and its overall score is lower than the global and regional averages. China’s economy has emerged largely unscathed from the global financial crisis and recession. The government has made expansionary fiscal and monetary interventions to counter the slowdown in international demand, and the export sector and government infrastructure investment continue to be the main drivers of economic expansion.

Subnational Doing Business Report

Doing Business in China 2008 compares the regulatory environment for business in 30 major cities. It measures 4 key indicators: starting a business, registering property, getting credit (creating and registering collateral), and enforcing contracts. While these indicators are not a full reflection of the local investment climate, they give cities a benchmark on which to build and monitor reforms.

Doing Business in China 2008 found that reforms were underway in all regions. It also noted significant variations in business regulations and their implementation across the country. The report suggests that localities would do well to adopt practices that are working in other Chinese cities.

Main Findings

  • Coastal regions scored highest overall on the ease of doing business. Yet there were good performers in the interior provinces, too. Chongqing, for example, had the greatest number of reforms and was in the top 10. 
  • If all Chinese cities’ best practices were combined in a single city, its overall ranking would be 63rd out of 178 in the global Doing Business 2008—24 positions higher than China’s ranking of 87th.
  • Improving the ease of doing business would give local policy-markers, particularly in poorer regions, a powerful tool to build their private sector. Cities where doing business is easier attract higher levels of investment in China.

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