Reforms to foster new economic growth drivers

Reforms in China to improve the business environment will continue, including to further reduce companies' tax burden, fostering new drivers of growth and promoting greater innovation to offset economic slowdown risks, according to officials.

This year, China is expected to achieve more than 2.3 trillion yuan ($327.2 billion) in tax and fee reductions, higher than the target of 2 trillion yuan set in March, Finance Minister Liu Kun said at a forum on Friday.

The government will continually take targeted new measures to improve the business environment and enhance the implementation of reform policies. "There is still room for China to catch up with the world's best practices and to follow the international prevailing rules," the minister said.

In the first three quarters, total tax and fee cuts were around 1.78 trillion yuan. Cutting taxes and fees will continually bolster the business investment in the corporate sector, support the development of small and medium companies and stabilize economic growth, according to Liu.

China's business environment showed one of the strongest improvements worldwide in the 12 months ending May 1 thanks to its robust reform agenda, according to the World Bank Group's Doing Business 2020 study issued in late October.

China has now been in the top 10 fastest reforming Doing Business countries around the world for two years in a row, mainly due to several business reforms. It has moved up in the ranking by almost 50 places in the process. Its rank this year climbed to 31st place in terms of ease of doing business, up from 46th a year earlier and 78th in 2017, the study showed.

"Development is like riding a bike: you cannot stand still because you will fall," Yang Shaolin, managing director of the World Bank, said at the same forum on Friday. "Continued reforms are needed."

For that to happen, a more dynamic enterprise sector is key, said Yang. "Regulations that facilitate the entry and exit of firms, ensure a level playing field, and encourage entrepreneurship and innovation are vital ingredients of a competitive business environment," he suggested.

The World Bank Group has been aware of China's efforts on implementing substantial reforms in protecting minority investors by imposing liability on controlling shareholders for unfair related-party transactions and clarifying ownership and control structures. "This is an important reform that will support further development of robust and efficient capital markets," according to Yang.

More measures that can help the world's second largest economy continually improve business environment, such as improving the legislative system including at the local government level, and opening up key service industries, Yang added.