Doing Business in China
Doing business in China: Middle of the road

The World Bank just came out with its 312 page “Doing Business” report, ranking 190 economies on just about every measure possible. It is important to note that the rankings are based on the ease of doing business for domestic companies and not for companies seeking to do business in a foreign country.

I skimmed the methodologies the World Bank used to rank these 190 economies and I am impressed. But in the end, I have to admit that I tend to judge these sorts of rankings by looking at the countries I know to determine whether the rankings match what I see as the realities, and this World Bank ranking absolutely does.

China came in at 78th, which seems about right to me.

  • Singapore — 2nd
  • South Korea — 3rd
  • Hong Kong — 5th
  • Japan — 34th
  • Mongolia — 62nd
  • Vietnam — 68th

Singapore and Hong Kong make complete sense to me as those are indisputably two of the most pro-business countries in the world. South Korea is pretty good for foreign companies but I am surprised to see it ranked so high. Japan’s ranking makes sense to me, but Mongolia and Vietnam seem a bit high to me and I would actually rank them behind China. But my knowledge stems from representing foreign companies and perhaps those countries are different for domestic companies.

The United States ranked sixth and that seems about right. Spain, where my firm has an office, ranked 28th, and that seems about right also. Germany, where we do a lot of work, ranked 20th and that too seems right.

Here’s something in the rankings I know many of you will find amazing: China ranks 5th in the world in terms of enforcing contracts. Fifth out of 190 economies. I think that ranking is too high, but it does strongly reinforce a point we are always trying to make on this blog: contracts work in China, so long as they are drafted for a China court. See China Contracts: Make Them Enforceable or Don’t Bother.

What do you think of these rankings?