IFC report: China performs well on business environment

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Last updated at: (Beijing Time) Friday, April 09, 2004

IFC report: China performs well on business environment

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China performs well in business judging by the indicators of business establishment, employment regulation, contract enforcement and credit market, said an International Finance Corporation (IFC) report released here Thursday.

That explains China's rocketing economic growth in recent years,said Michael Klein, World Bank vice president and chief economist of IFC, the private sector arm of the World Bank Group.

Klein the author of the report who had witnessed the major progress that the Chinese economy achieved in recent years, said he was positive on China's future growth and believed it might catch up with some developed countries in the next decade.

The report, named Doing Business in 2004: Understanding Regulation, collects and analyzes data on 133 countries, includingcountries of the Organization for Economic Cooperation and Development (OECD).

The analysis is based on assessment of each country's laws and regulations, with input from and verification by local experts, and allows countries to benchmark themselves against neighbors, major competitors and countries that developed best practice on the various indicators.

According to the report, China performs well on the cost of establishing a business, only accounting for 14 percent of the percapita income, which is well below the East Asia average of 56.8 percent and close to OECD average of 10.2 percent.

It probably takes 46 days to start a business in China, 20 daysless than that of East Asia average, the report added.

The report also showed that China excels in employment flexibility, which ranks first, together with Czech Republic, among the investigated countries.

However, the report said China performs less well on creditor rights and creditor information systems.

Creditor information sharing is important because it opens up credit markets by expanding access to first-time borrowers and repeat borrowers with good credit histories, said Klein.

For this reason, he said, China is currently making efforts to improve its creditor information sharing system and establish credit bureaus in various province and regions.

Source: Xinhua

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