Business Indicators Summary

With an overall score of 5.32/12, China is below standard on the economic, legal, and political indicators that make up our Business Index. China is an economy dominated by state-owned enterprises, with market-oriented reforms gaining momentum. Foreign investment in China is restricted to specific sectors, and the regulatory system is not transparent, laws are inconsistently enforced, and there are protectionist industrial policies that favor local companies. Progress has been achieved in addressing shortcomings in the property rights framework; however, the Chinese Government has yet to implement effective enforcement measures to deter widespread infringement of intellectual property rights. Corruption still represents an obstacle to investment in China, particularly in sectors where government approval is required. Rooting out corrupt practices is hindered by the fact that all investigations are ultimately controlled by the Communist Party and the absence of independent reporting on investigation activity.