China quibbles with World Bank report

Asia Briefing: The World Bank's annual Doing Business report takes a comprehensive look at how easy it is to do business around the world by measuring the regulations facing small and medium-sized enterprises (SMEs).

However, China last week said it was unhappy with the report and wants to change the way it is compiled.

China was ranked 91st among 185 economies worldwide in the most recent report, which was released in October 2012. The country’s position was dragged down by heavy tax burdens and the bureaucracy involved in granting business permits.

The report "used wrong methodologies, failed to reflect facts, misled readers and added little value to China's improvement of the business environment", Han Bin, China's deputy executive director at the World Bank, told the Financial Times .

Labour costs
The World Bank report does note improvements made by China, such as a move to make starting a business less costly by exempting micro and small companies from paying several administrative fees, and simplifying the process of obtaining a construction permit by streamlining and centralising preconstruction approvals.

Last year, at the request of China and others critical of the report, World Bank president Jim Yong Kim set up an independent panel to solicit comments to review the Doing Business report.

China’s foreign direct investment fell 3.7 per cent to €85 billion last year, but it rose 1.44 per cent in the first quarter of the year. Investment has been hit by rising labour costs in China, and China is also aiming at developing high-end manufacturing, which has less appeal for foreign companies which mostly focus on lower value-added business.

The 10 economies with the most business-friendly regulation are Singapore, Hong Kong, New Zealand, the United States, Denmark, Norway, Britain, South Korea, Georgia and Australia.

It’s the seventh year in a row that Singapore has won. Ireland is in 15th place.