China's business environment has continued to improve this year. Despite turbulence in the global economy thanks to a series of disputes between some of the world's financial superpowers, foreign investment in China has continued to grow. This is a vote of confidence in China's economic future and the effort that has been made to improve the country's business environment.

The improvements have been recognized by the World Bank. The country has joined the ranks of the world's 10 most improved economies for ease of doing business for the second year in a row thanks to its robust reform agenda, according to the World Bank Group's Doing Business 2020 study.

China carried out a record of eight business reforms during the 12 months ending May 1 and ranked 31st globally on the ease of doing business rankings with a score of 77.9 out of 100. It ranked 46th last year and 78th in 2017.

"China has undertaken substantial efforts to improve the domestic business climate for small and medium-sized enterprises, maintaining an active pace of reforms," said Martin Raiser, World Bank Country Director for China. "Laudable progress has been achieved on a number of Doing Business indicators, particularly in the area of construction permitting."

Large scale tax and fee reductions

Chinese Premier Li Keqiang announced in March that China will reduce the tax burdens and social insurance contributions of enterprises by nearly two trillion yuan (about 298 billion U.S. dollars) in 2019 to bolster the corporate sector, especially for private and small enterprises.

China also announced measures in April to reduce government-levied charges and operating service fees by more than 300 billion yuan (44.7 billion U.S. dollars) this year. Coming into effect from July, the measures are aimed at further lessening the burden on businesses and individuals.

China's new tax and fee cut policies saved 1.78 trillion yuan (around 252 billion U.S. dollars) for businesses and individuals in the first three quarters of 2019, official data showed.

Among the total reduction, 703.5 billion yuan were saved thanks to value-added tax (VAT) reform.

The manufacturing sector benefited the most among all other sectors from the VAT reduction, saving 473.8 billion yuan.

Tax cuts in China's manufacturing sector not only the lower financial burdens and improve the business forecast of the sector itself, but also benefit other parts of the economy through supply chains.

Integrated efforts to improve China's business environment

The implementation of a series of measures to streamline administration and facilitate trade and large-scale tax and fee cuts have led to the expansion of private sector imports and exports in both volume and proportion. A 6.12 trillion yuan (890 billion U.S. dollars) contribution from the private sector accounted for 41.7 percent of China's total foreign trade in the first half of this year.

China's State Council published regulations on Wednesday on optimizing the business environment to unleash productive forces, as well as advancing high-quality development. Released under a decree signed by Premier Li, the regulation will become effective on January 1, 2020.

The regulation specifies the principles and directions for fostering a stable, fair, transparent and predictable business environment in alignment with advanced international levels.

It also clarifies rules regarding the faster establishment of enterprises, equal market access, the solid implementation of tax and fee reduction policies, and the easing financing difficulties.

Meanwhile, the regulation details efforts on cutting red tape, streamlining administrative approval, and improving supervision and administrative law enforcement.

China also passed the Foreign Investment Law (FIL) in March in supporting a high standard of opening-up under new circumstances.

The law intends to bring foreign businesses broader market access, protect their intellectual property, prohibit forced technology transfer and guarantee a "level playing field" for both foreign and domestic companies.

China remains a magnet for foreign investment

China's latest foreign direct investment (FDI) data is testament to the country's stronger appeal to foreign investors, who have shown widespread optimism in a fast-growing market.

FDI into the Chinese mainland rose 6.6 percent from a year earlier to 752.41 billion yuan (about 107 billion U.S. dollars) in the first ten months of this year, the Chinese Ministry of Commerce (MOFCOM) said Monday.

In U.S. dollar terms, FDI inflows stood at 110.78 billion U.S. dollars during the period, up by 2.9 percent year-on-year.

FDI in October alone reached 69.2 billion yuan, up 7.4 percent year-on-year, according to MOFCOM.

Overseas investment in high-tech industries surged 39.5 percent year-on-year to 222.48 billion yuan, accounting for 29.6 percent of the total FDI.

MOFCOM said they were hard-fought results, especially in the face of slow global economic growth. The ministry believes that the nation's foreign investment remains steady in both figures and quality, stressing that China will continue opening up its market to attract more foreign investors.

"This shows foreign investors' confidence and good expectations in their investments in China, despite a lagging global investment environment this year," said Zong Changqing, director of Foreign Investment Administration of MOFCOM. "We have also received over 1,300 big projects worth more than 50 million U.S. dollars each, which is a 5.4 percent growth year-on-year," he added.

The director said that while investment in manufacturing had dimmed, hi-tech industries have seen a nearly 40 percent increase, especially in its service sectors which have witnessed a 70 percent surge. With a combination of policies that have been implemented or are coming out soon, Beijing has shown measures to further encourage foreign investment in the Chinese market.

"We are using the introduction of the Foreign Investment Law as an opportunity to push forward the system of protection, encouragement and management of foreign investment. That way China can promote development of an open economy to a higher level," said Ye Wei, deputy director of the administration.