A business environment comprises elements related to investment and operation of enterprises, including laws and policies, financing sources, industrial support, geo-positioning and social and cultural milieus. And a good business environment is a precondition for attracting investment, nurturing and cultivating entrepreneurship, and fostering economic growth.
Over the past five years, the business environment of China has been constantly improving with its ranking rising from 46th last year to 31st this year in the World Bank's ease of doing business list. The government has not only further opened up the economy and implemented new economic policies conducive to doing business, but also passed business-friendly laws and regulations and made strenuous efforts to create a stable, transparent and predictable business environment.
The government has taken these moves to optimize the business environment in order to encourage domestic and international enterprises to invest more in China and share the fruits of its economic development. Since 2014, the increasing costs of factors of production such as land, raw materials and labor, and strengthening environmental protection regulations have made one thing clear: we can no longer depend on the traditional ways to attract investment.
Besides, the resurgence of the manufacturing industry in some developed countries and the low-cost advantage of some developing countries have also fueled the investment competition between different countries and regions.
Still, since improving the business environment is an important way to attract more investment and bolster national strength, the Chinese government has taken a series of measures in that direction.
First, the government has made great efforts, including introducing business-oriented laws and policies, to build a world-class business environment. Big cities such as Beijing and Shanghai have taken the lead in this field. For example, they have taken measures to make it more convenient for start-ups and construction projects to get business permits and electricity connections. They have also strengthened protection for small and medium-sized investors and cross-border traders.
Second, the government has opened up new sectors to domestic and foreign companies, and shortened the negative list so that more foreign entities feel confident of investing in China. For example, in 2015, the national negative list had 122 items, which has now been reduced to just 40 items.
Third, the government has deepened the reform to streamline the administration, delegate more powers to lower-level administrative bodies, and improve regulations and services. It has also slashed the administrative approval items, cut taxes, and set up transparent supervision rules and a standard system to further invigorate the market.
Fourth, China has also passed the new Foreign Investment Law, which safeguards the interests of both domestic and foreign companies in equal manner. And regulations on optimizing the business environment have set institutionalized standards for the protection of market entities, market environment, government services, as well as for supervision and law enforcement and legal guarantee.
And fifth, it has adopted multiple approaches to propel domestic consumption while taking measures to improve the consumption structure. Thanks to China's huge market and favorable regulations, both domestic and foreign enterprises can now more easily access the consumer market, which has huge growth potential. As such, investors would feel more confident of injecting more funds into the Chinese market and benefiting from its sustainable and qualitative growth.
Foreign businesses have praised China for making sincere and successful efforts to improve its ranking on the ease of doing business list.
But we should recognize that China's ranking doesn't match its status as the world's second-largest economy, which means we still have a long way to go to become a truly global economic superpower and therefore we should continue our efforts to further improve the business environment. And for that, we should continue to deepen reform and strengthen innovation to create a market-driven world-class business environment.
The author is deputy director of foreign investment research institute, Chinese Academy of International Trade and Economic Cooperation. The views don't necessarily represent those of China Daily.