Beijing, September 6, 2006 –
 China has picked up the pace of its reforms and is among the world’s 
top 10 reformers on the ease of doing business, according to a new 
report by the International Finance Corporation and the World Bank. 
Improvements in the regulatory environment mean China ranks 93 out of 
175 countries on the ease of doing business. While 14 reforms in seven 
economies in the region reduced the time, cost, and hassle for 
businesses to comply with legal and administrative requirements, East 
Asia’s overall progress in regulatory reforms lags behind all other 
regions except South Asia, a fall from fourth to sixth place.
Doing Business 2007: How to Reform finds
 that China implemented reforms to speed business registration and 
trading, ease access to credit, and strengthen investor protection, 
making it the top reformer in the region and the fourth best worldwide. 
China reduced the time to register a business from 48 to 35 days and cut
 the minimum capital required from 947 percent to 213 percent of income 
per capita, making it easier for entrepreneurs to start new businesses. 
It also established a credit information registry for consumer loans. 
Now 340 million citizens have credit histories, improving their access 
to credit. Amendments to the company law strengthened investor 
protections against insider dealings. And new online customs procedures 
reduced the time to import and export by two days, helping international
 competitiveness.
The
 report finds that while East Asian economies impose the fewest 
regulatory obstacles on business after OECD countries, they are now 
reforming more slowly than all other regions except South Asia . Less 
than half of the East Asian economies introduced one or more reforms 
that improved the Doing Business indicators. By comparison, every 
Eastern European country reformed except Slovenia.
“More
 progress is needed. East Asian countries would greatly benefit from new
 enterprises and jobs, which can come with more business-friendly 
regulations,” said Michael Klein, World Bank-IFC vice president for 
financial and private sector development, and IFC chief economist.
Doing
 Business 2007 also ranks 175 economies on the ease of doing 
business—covering 20 more economies than last year’s report. Singapore 
became the most business-friendly economy in the world in 2005–2006, as 
measured by the Doing Business indicators, after last year’s winner, New
 Zealand , made business licensing more difficult. The runner-up economy
 in the region is Hong Kong ( China) (5), followed by Thailand (18), 
Malaysia (25), Mongolia (45), Taiwan ( China) (47), China (93), Vietnam 
(104), Philippines (126), Indonesia (135), and Cambodia (143). Lao PDR 
(159) and Timor-Leste (174) are ranked lowest in the region. The top 30 
economies in the world are, in order, Singapore, New Zealand, the United
 States, Canada, Hong Kong (China), the United Kingdom, Denmark, 
Australia, Norway, Ireland, Japan, Iceland, Sweden, Finland,
Switzerland,
 Lithuania, Estonia, Thailand, Puerto Rico, Belgium, Germany, the 
Netherlands, Korea, Latvia, Malaysia, Israel, St. Lucia, Chile, South 
Africa , and Austria.
The
 rankings track indicators of the time and cost to meet government 
requirements in business start-up, operation, trade, taxation, and 
closure. They do not track variables such as market size, macroeconomic 
policy, quality of infrastructure, currency volatility, investor 
perceptions, or crime rates.
Notable reforms in East Asian economies included:
- Vietnam cut the documents and time required to obtain building permits and allowed employers
- to use fixed-term contracts for any type of task, making hiring easier.
- Cambodia set time limits on obtaining business licenses—reducing delays by 66 days—and modernized customs, cutting time to export by seven days and time to import by 10 days.
- Hong Kong ( China) improved investor protections by increasing the availability of internal company documents for inspection, boosting transparency. The time to import and export dropped from 16 and 13 days to only five days, after three new boundary bridges opened and customs documents were simplified and put online.
- Lao PDR introduced a new collateral law that eases access to credit by allowing businesses to use their movable assets as collateral without giving up possession.
- Indonesia reduced business start-up time from 151 to 97 days by speeding approval of the incorporation documents at the Ministry of Justice.
- Thailand amended its law on credit information, making it easier for lenders to evaluate the creditworthiness of borrowers, thereby improving access to credit.
- Timor-Leste, counter to the regional trend, made it more difficult to do business, refusing to grant any new licenses for construction firms.
The
 greatest remaining obstacles in the region documented in the report are
 cumbersome start-up procedures and costly licensing requirements. For 
example, in Cambodia, it takes 10 procedures and 86 days to start a 
business. In the Philippines, it takes 23 procedures and 193 days and 
costs 113 percent of income per capita to meet the regulatory 
requirements to build a warehouse. Doing Business allows policymakers to
 compare regulatory performance with other countries, learn from best 
practices globally, and prioritize reforms.
“The
 annual Doing Business updates have already had an impact. The analysis 
has inspired and informed at least 48 reforms around the world. The 
lesson—what gets measured gets done,” said Caralee McLiesh, an author of
 the report.
Globally
 the most popular reform in 2005–2006 was easing the regulations of 
business start-up. Forty-three countries simplified procedures, reducing
 costs and delays. The second most popular reform— implemented in 31 
countries—was reducing tax rates and the administrative hassle of paying
 taxes.
“Whatever
 reformers do, they should always ask the question, who will benefit the
 most? If reforms are seen to benefit only foreign investors, or large 
investors, or bureaucrats-turned-investors, they reduce the legitimacy 
of the government. “Reforms should ease the burden on all businesses: 
small and large, domestic and foreign, rural and urban. This way there 
is no need to guess where the next boom in jobs will come from. Any 
business will have the opportunity to thrive,” said Simeon Djankov, an 
author of the report.
Online Media Briefing Center:
Journalists
 can access the material before the expiration of the embargo through 
the World Bank Online Media Briefing Center at 
http://media.worldbank.org/secure/. Accredited journalists who do not 
already have a password may request one by completing the registration 
form at http://media.worldbank.org/.
The
 Doing Business project is based on the efforts of more than 5,000 local
 experts – business consultants, lawyers, accountants, government 
officials, and leading academics around the world, who provided 
methodological support and review. The data, methodology, and names of 
contributors are publicly available online at 
http://www.doingbusiness.org.



