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Business climate in China optimized

Updated: Jul 15,2019 05:32 PM    People’s Daily/english.gov.cn

This year, especially, enterprises targeting the China market have seen a better business climate, more convenient, international, and law-based, thanks to implementation of policies that offered supportive government services, reduced fees and tax cuts, widened access for foreign investment, and enhanced legal environment.

Starting a business, immovable property registration, and installation of water and power have become more time-saving and convenient, with the promotion of Internet Plus administrative services. For instance, a restaurant owner in Beijing who applied for a license via the internet received the grant within one working day instead of the five working days it took last year.

Meanwhile, this year’s tax cut and fee reduction policy is a strong boost for development. On April 1, the reform of value-added tax (VAT), the main course of the policy, was officially launched. In April, VAT decreased over 1.2 million yuan, and the annual reduction is estimated to be around 8 million yuan, while the overall tax cut this year is expected to exceed 1 trillion yuan.

As a result, confidence index of key tax source enterprises in China rose from 121.16 points in the fourth quarter of last year to 125.23 points in the first quarter of this year, indicating a promising trend in enterprises’ production and operation in which they are more willing to invest.

More foreign investment, under fair rules of competition, was absorbed into the Chinese market. For example, finishing permission and preparing procedures quickly in one year, in the beginning of this year, Tesla Motors started to build its first overseas gigantic factory at the port of Shanghai, the first wholly foreign-owned project in the field of new energy vehicles after the restriction on foreign ownership ratio was lifted.

In addition, the actual use of foreign investment in hi-tech industries grew by 44.3 percent year-on-year, showing an optimized structure of foreign investment. Imported commodities and services are emerging in China on a larger scale. Contributing factors to the market include widened market access, strengthened international cooperation for intellectual property protection, and the fair competition review system, which prohibited local protection, designated trade and market barriers.

Another stabilizer for an open and friendly business environment is the enhanced laws: The upgraded Trademark Law released on April 23, which set the penalty for malicious infringement of the exclusive right to use a trademark up to 5 million yuan. CNIPA Commissioner Shen Changyu noted that this is a comparatively high level of punishment around the world. And the Foreign Investment Law, passed by China’s top legislature in March, puts foreign-invested enterprises on an equal footing with domestic enterprises, and protects their intellectual properties and technologies. Thyssen Krupp’s CEO in Greater China Gao Yan said the law, involving a negative list management mode, plays a fundamental role in boosting expectations and confidence in foreign investment.

Hu Yijian, an expert on public policy and governance at Shanghai University of Finance and Economics, said that a favorable business environment is playing its role in raising enterprises’ profits, stabilizing market expectations, encouraging exports, and absorbing foreign investment, which meets the requirement of supply-side reform.

According to the World Bank’s Doing Business Report released last year, China is one of the economies with the largest improvements in business environment, with its global ranking rising from 78th to 46th.

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