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October 28, 2019

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Home » Business » Finance

Shanghai, lifted by WB business report, aims big

By Huang Yixuan | 00:00 UTC+8 October 28, 2019 | Print Edition

SHANGHAI, which has improved the business environment substantially over the years, plans to make it further easier to do business in the city.

The city, with a 55-percent weighting in the World Bank’s Ease of Doing Business 2020 report, has hugely contributed to China’s business development.

Of the 10 indicators assessed by the bank, eight of them ranked in the top 60 globally and five in the top 30, said Chen Yin, executive vice mayor of Shanghai. “This indicates that the business environment reform in Shanghai has made great progress in both depth and effectiveness.”

The biggest improvement was in dealing with construction permits. Shanghai advanced sharply by 88 places to the 33rd, with a full score of 15 on the building quality control index. This was after the city had launched an integrated service system for the joint examination and approval of construction projects, as well as an offline examination and approval center to deal with the applications.

The city also jumped 36 places to stand at 28 globally for “protecting minority investors” indicator; up one place to 27 for “starting a business;” up two spots to 12 for “getting electricity;” and improved by a spot to fifth in “enforcing contracts.”

The five licenses previously required to start and operate a new business — the business license, the organization code certification, the tax registration, the statistics registration and the social welfare insurance registration — have been combined into one license.

It also climbed up nine places to 56 in trading across borders, and up 10 places to rank 51 in resolving insolvency. The city also went up nine places to 105 for paying taxes. The time needed for businesses in Shanghai to prepare, file and pay taxes has been reduced to just 138 hours per year on average, and companies only need to make seven payments.

For example, it took barely 10 months for the Tesla Shanghai Gigafactory to start trial production since it broke ground. The company also said the facility was about 65 percent cheaper to build than its Model 3 production plant in the United States.

The two indicators for registering property and for getting credit, however, fell one and seven places, respectively, to stand at 28 and 80 globally.

Some of the reforms in Shanghai were launched late and had not accumulated sufficient cases, while some other reforms had not been publicized and therefore were not known to the professional institutions involved in the bank’s assessment work, said Zhu Min, deputy director of the city’s development and reform commission while explaining the reasons why some aspects had drawn a negative mark on the bank’s assessment of the city.

“A good business environment is about productivity,” Chen pointed out. “After two rounds of reform in the business environment, we realized that improving some ‘soft’ environments such as optimizing systems can be more effective in attracting investment and promoting employment, and our efforts to constantly improve the business environment have a positive effect on economic development.”

Faced with the complicated international situation and the downward pressure on the economy, the continuous optimization of the business environment has boosted the confidence of enterprises in investing in the city, Chen said.

Shanghai’s economy maintained stable growth in the first three quarters of this year.

Finance


 

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