Business environment has been recognized as containing critical elements that affect the performance of firms and entrepreneurs and one of the pre-requisites for economic growth and poverty reduction in developing and transitioning economies. Improving the business environment has been an important part of China’s 40-year reform and opening up. Since 2013, China has taken business environment optimization as one of the main means to improve China’s economic competitiveness through continuously pushing forward nationwide reforms, including further delegating power and streamlining administration, simplifying approval procedures and cutting taxes and fees. China’s progress, measured by the Ease of Doing Business Project of the World Bank, has been particularly impressive over the last several years when its ranking jumped from 96 in 2014 to 31 in 2020.
The objective of this report is to: (i) document China’s business environment improvement in the different stages after the reform and opening up in 1978, with special attention to the reforms after 2013; (ii) analyze the key reform policies and measures, as well as the institutional arrangements; and (iii) inform and inspire other countries, especially the Southern economies that also aspire to improve the business environment.