Shanghai’s enhanced efforts for companies pay off with leading position in World Bank report

Shanghai’s continued efforts to create an amiable business environment will boost economic vibrancy and elevate market confidence, translating into the growth momentum necessary to confront the headwinds in the global economy, said experts and corporate executives.

The comments came after the municipal government released a circular on May 8, outlining 10 major missions that Shanghai should undertake to enhance its business environment by deepening the alignment with the World Bank criteria.

The circular said that, besides carrying out more reforms by referring to the bank’s standards and internationally advanced experiences, favorable government policies should be more easily accessible for companies.

The city will launch an online platform that companies can use to search for applicable policies and obtain approvals. A “policy calculator” will also be introduced to explicitly explain the application conditions and scope for certain policies.

The circular said financing costs for small and medium-sized enterprises should be lowered, while innovative financing services should be provided to these companies. Therefore, Shanghai will promote a speed loan action among industrial parks, which was first attempted in the industrial parks in the city’s Hongkou district.

Companies should also be facilitated regarding bankruptcy, as this is one of the gauges in the World Bank reports. According to the government circular, higher efficiency in this aspect will help the market evolve at a faster pace, assist companies with their restructuring, and optimize the resource allocation in the market.

As explained by Chen Yanfeng, deputy director of Shanghai Municipal Development & Reform Commission, the World Bank revised the methodology handbook for its Business Ready report in 2023, emphasizing the effectiveness of supervision regulations and public services, as well as the mood of enterprises.

Shanghai’s new action plan to enhance its business environment, released at the beginning of the year, bears the same focus areas as the World Bank standards.

“In other words, companies have the final say when it comes to the evaluation of the business environment,” said Chen.

Creating a more business-friendly environment is among the key objectives of the municipal government, as underscored by the 10 major missions, which include down-to-earth and breakthrough measures. He said problems frequently encountered by companies will be better addressed.

That is consistent with Shanghai’s efforts to stabilize employment, companies’ operations, and market expectations. Chen said that, in this way, Shanghai can seek high-quality development to confront uncertainties amid the changing external environment.

The Shanghai government has used big data to identify the eligible companies for certain favorable policies.

According to Yan Wenzhou, chief product officer of Shanghai-based Bioyond Robotics, long-term investment in research and development is crucial to the company as it specializes in intelligent automation solutions for the life science industry. Bioyond has been granted subsidies directly via a mechanism that ensured the company did not have to fill in any forms or go through any applications.

“On the one hand, we can use the time and energy for R&D, which might have been consumed for complicated applications for government support. On the other hand, we have indeed benefited from the government incentives, using the subsidies for technology innovation, and transforming the research results into products at a faster pace,” Yan said.

As explained by Chen of the Shanghai Municipal Development & Reform Commission, another major change in the World Bank’s evaluation system is the diverted focus from the domestic market to the international market. Frontier reform ideas from various industries have been integrated into the bank’s new methods.

“Serving as China’s window of opening-up, Shanghai has long featured the outbound economy. Aligning with the World Bank standards can help Shanghai attract more high-end resources from home and abroad while enhancing its international competitiveness,” said Chen.

Furthermore, according to the latest World Bank report, Shanghai has reached the best level for 22 gauges among the 59 that the World Bank has used to measure the business environment.

The findings were part of the World Bank’s Enterprise Surveys Country Profile China 2025.

This shows that Shanghai has made substantial progress in terms of aligning with international standards, optimizing rules and regulations, optimizing government services, and improving companies’ operation efficiency, said Luo Peixin, deputy head of East China University of Political Science and Law.

Yao Weiqun, executive director of the Shanghai Institute for Strategy of the International Trade Center, further explained that Shanghai-based enterprises gave an average score of 99.13 for the gauge of international trade, higher than the 89.1 score in Singapore.

He said it means that Shanghai companies have a high recognition of the city’s customs services and the implementation of trade regulations.

Government bodies in Shanghai have conducted special programs for seven consecutive years to optimize procedures, improve efficiency, and lower costs for cross-border trade. Yao said up to 173 reform measures have been introduced over the past few years.

Under closer scrutiny, Shanghai companies gave a score of zero under the gauge of power outage. The e-payment cost in Shanghai is zero. The surveyed companies gave an average score of 96.2 for the experiences of changing internet service providers.

The city scored 100 when it comes to the substitution of commercial dispute resolution. Shanghai has reached the world’s top level for all these gauges, according to the World Bank report.

Shanghai has also reached the world’s leading level in terms of tax payment time, loan application time, internet stability, and the accessibility of government procurement and bidding.

Singapore reached the best level for 10 gauges. The country ranked second in the World Bank’s Doing Business evaluation. It dislodged all the first batch of economies surveyed for the World Bank’s Business-Ready report.

Luo of East China University of Political Science and Law said Shanghai’s achievements are closely related to the city’s continued efforts to advance institutional reform.

For example, Shanghai’s stable power supply can be largely attributed to the city’s power supply provisions that went into effect in 2016. According to the provisions, when an outage is reported, power supply companies should arrive at the scene within 60 to 90 minutes.

Shanghai has been developing related rules and regulations to better connect to the internationally accepted practices.

With the first action plan to improve the city’s business environment in 2018, Shanghai has seen the plan upgraded to the eighth edition this year. A total of 1,101 measures have been introduced via the plans to facilitate the development of local companies.

Contact the writer at shijing@chinadaily.com.cn