China's pursuit for world-class business environment

Editor's note: Ma Xiaobai is a research fellow of the Development Research Center of China's State Council. Hu Shiyun is a PhD student of Peking University. The article reflects the authors' opinion, and not necessarily the views of CGTN.

China's remarkable economic rise in the past four decades owes much to its reform and opening-up policy, which transformed it from a planned economy to a market economy, lifted hundreds of millions of people out of poverty, and made it the second-largest economy in the world. 

A natural question to ask is: What China has done really right to generate such an economic miracle?

China's answer is simple: a conducive business environment. A conducive business environment is the set of conditions and institutions that affect the ease and cost of doing business. It stimulates the activeness and creativity of market participants, and attracts foreign investment and cooperation. It fosters innovation and entrepreneurship, and enhances the competitiveness and efficiency of the economy. 

Having entered the "new era," faced with challenges from both internal transformation and external uncertainty, China has determined to do what has proved to be right: further improve its business environment, and make it world-class.

In the past 10 years, China has been consistently reforming its business environment, using World Bank's Doing Business as a reference. Doing Business measures the ease of doing business in 190 economies, based on 10 indicators that cover different aspects of the business cycle. According to the latest report, China ranked 31st in 2020, up from 78th in 2010, making it one of the top improvers. 

China's reform efforts have mainly focused on four key areas: property rights protection, market access, fair competition and social credit. In each of these areas, China has made significant progress and achieved remarkable results.

Property rights protection is the foundation of a market economy, as it provides incentives and security for market participants to invest, innovate and trade. China has strengthened the protection of property rights, especially intellectual property rights (IPR), by revising various related laws and regulations, establishing specialized courts and tribunals, increasing the enforcement and deterrence of IPR violations, and enhancing the quality and quantity of IPR applications and registrations.

Market access is the gateway to a market economy, as it determines who can enter and exit the market, and under what conditions. China has continued to relax market access and promote the free flow of factor resources. 

Since the full implementation of the negative list system for market access in 2018, China has continuously standardized and integrated the national list, comprehensively cleaned up the local lists, established a "one list for the whole country" management model, promoted entry of all types of business entities to industries, fields and businesses outside the list in accordance with the law, and continuously eliminated market access barriers. 

Fair competition is the engine of a market economy. In the past 10 years, China has promoted fair competition, especially among different types of enterprises, by abolishing or revising discriminatory or preferential policies and regulations, establishing and improving the fair competition review system, anti-monopoly enforcement, and anti-unfair competition supervision, and supporting the development of small and medium-sized enterprises. 

Besides, China has standardized bidding and tendering in government procurement, and carried out a special rectification of the business environment in the field of bidding and tendering.

China's reform achievements have not only improved its own business environment, but also contributed to the global business environment. China has become a major destination and source of foreign investment, a leader and partner of innovation and cooperation, and a supporter and participant of multilateralism and globalization.

However, China's reform journey is far from over. Some of the future directions of reform are: expanding the reform to more areas and industries, focusing more on the actual experiences of firms besides the formal laws and regulations, and aligning better with world standards.

China's business environment reform is a crucial task for the Chinese government, and a valuable opportunity for the world. As China celebrates the 45th anniversary of the reform and opening-up this year, it is also reaffirming its commitment to future reforms, and to building a community with a shared future for mankind.