BEIJING, Sept 26: China has become a leader in tearing down barriers to business, but lots of red tape remains, a report from the private investment arm of the World Bank said on Wednesday.

The world’s fourth-largest economy has been “a standout in regulatory reform,” the International Finance Corporation (IFC) said in its Doing Business 2008 report.

“While there is a room for improvement, it is clear that China is making steady progress in improving business conditions for companies, including small- and medium-sized enterprises,” Michael Ipson, the IFC’s manager for China and Mongolia, told reporters.

China was ranked among the world’s top 10 reformers, along with nations such as Egypt, Croatia and Ghana, the IFC said.

The report, which has been published five times and ranks almost all the world’s economies on the ease of doing business, in particular singled out two reforms from the past few months in China.

A new property law in March helped to put private property rights on an equal footing with state property rights and made it easier for companies to find collateral for loans.

China also adopted a new bankruptcy law in August, giving secured creditors priority to proceeds from their collateral, according to the report.

This reassurance is likely to make investors more willing to finance projects in China.

“We see that the number of businesses being established in China grows every year and that it is in fact a government policy to nurture a climate which allows companies to be established and grow,” said Ipson.

In the first eight months, 24,848 foreign enterprises invested in China, according to commerce ministry data. There were no immediately available data on the establishment of local enterprises in the same period.

However, China was only number 83 when ranked according to “ease of doing business,” and IFC officials pointed out examples where enterprises must still deal with large amounts of bureaucratic red tape.

Justin Yan, one of the authors of the report, said a company must go through an exhaustive, and exhausting, 37 procedures to get a construction licence.

On average, a company operating in China also has to spend 872 man hours annually to complete tax procedures, he said.

“That’s about a month. So that’s quite a long time,” he said.

Yan warned that East Asia and the Pacific were “near the bottom” in terms of reform.

“What we see here is that a region that continues to do quite well economically but perhaps runs the risk of being left behind simply because it is not keeping up with other regions in the paces of business reform,” he said.

“This year for the first time in the history of the report, Eastern Europe surpassed East Asia in the ease of doing business.”

China Oilfield: China Oilfield Services will list on the Shanghai Stock Exchange on Friday after raising 6.74 billion yuan (US$899 million) in its initial public offer of A shares, the company said on Wednesday.

The drilling and equipment arm of top Chinese offshore producer CNOOC group sold 500 million new A shares, or 11.1 per cent of its enlarged share capital, at 13.48 yuan per share.

The offer drew a total of 2.17 trillion yuan in retail and institutional subscriptions, the second-largest amount for any domestic Chinese IPO.—AFP/Reuters