Lingang’s Business Development Report-SHLINGANGIC

Recently, PwC Consulting China (Shenzhen) Co., Ltd. Shanghai Branch released the “Lingang Special Area Business Environment Development Report”.  According to the 10 first-level indicators of the World Bank’s “Ease of Doing Business Score”, the Lingang Special Area has an overall score of 83.2.  According to the World Bank’s “Doing Business 2020 Report”, Lingang Special Area’s business environment ranks higher than Norway and Sweden in the world.

The “Lingang Special Area Business Environment Development Report” adopts the “18+N” indicator system, including 10 first-level indicators for the World Bank’s business environment, 8 first-level indicators for the national business environment, and 6 characteristic first-level indicators for Lingang. The World Bank’s first-level indicators of business environment focus on the entire life cycle of enterprises and achieve international comparability. The indicators include starting a business, obtaining construction permits, obtaining electricity, registering property, obtaining credit, protecting small and medium-sized investors, paying taxes, cross-border trade, executing contracts, and dealing with bankruptcy.

Based on current assessment, the Lingang Special Area has an overall score of 83.2 points, compared with 80 points in the previous year. According to the “Doing Business 2020 Report” released by the World Bank, the business environment of Lingang Special Area is among the best in the world, lower than New Zealand (86.8 points), Singapore (86.2 points), Denmark (85.3 points), and the United States (84.0 points), Britain (83.5 points), etc., surpassing Norway (82.6 points), Sweden (82.0 points), Lithuania (81.6 points), etc.

Qin Jie, a partner in charge of government affairs at the Shanghai branch of PwC Consulting (Shenzhen) Co., Ltd., said that the business environment of the special area is generally at the second level in the world, and some indicators are at the leading level.

Among the 10 first-level indicators of the World Bank’s business environment, the performance of construction permits was the most outstanding, with a perfect score of 100, surpassing New Zealand (86.5 points), Singapore (87.9 points), and Hong Kong, China (93.5 points). It took 20.5 days to process the construction permit in the Lingang Special Area, and the construction quality control index of the special area received a perfect score of 15 points.

The high score comes from several reform measures in the special area, including the new area management committee centralizing the exercise of approval and law enforcement powers. The first batch of 517 law enforcement powers has been officially delegated; the Tesla demonstration effect has been consolidated and deepened, the process re-engineering around construction permit has been explored, parallel processing has been expanded, and the notification commitment and the mechanism for replenishment after vacancies have been optimized.

Lingang Special Area scored 99.6 points and 93.8 points for starting a business and obtaining electricity respectively.  Relevant reform measures include the pilot enterprise name registration notification commitment system, and the promotion of the reform of the commercial entity registration confirmation system. This further optimizes the power connection, realizing direct acceptance, and simplifying the handling process within 10 working days.

The tax and bankruptcy scores are relatively low, 69.6 points and 69.5 points respectively.  The tax score is higher than India’s 67.6 points, and the bankruptcy score is second to Singapore’s 74.3 points.

In terms of bankruptcy, the special area has improved the rescue and exit mechanism of market entities, coordinated the settlement of debt disputes; accelerated the expansion of the service window, established voluntary legal service windows for administrators, and provided bankruptcy application consulting services. It has also explored cross-border bankruptcy recognition and judicial assistance in the special area.

The national business environment first-level indicators focus on high-quality urban development and urban attractiveness, and are in line with Chinese characteristics. Its indicators include the use of water, labor market regulation, government procurement, tender bidding, government service, intellectual property creation and protection, market regulation, inclusive innovation.

The special area of the city performed well against the national business environmental indicators. In the indicators, the market supervision and government services performed the best. Market supervision performed well mainly due to the full implementation of the Pudong New Area “six coordinated mechanisms” that strengthen the supervision during and after the event.

​In terms of government service, with the in-depth advancement of online business operations and process optimization, the “one-stop service model” has been 100% achieved.

The first-level indicators for the business environment characteristics of the Lingang Special Area focus on the strategic goals of the development of the special area and guide the development of regional differences. The indicators include investment freedom, trade freedom, capital freedom, transportation freedom, talent freedom, and information accessibility.

Judging from the evaluation, the Lingang Special Area is relatively strong in the comprehensive scores of information accessibility and investment freedom. Its performance in the areas of freedom of transportation and human resources needs to be improved, but there has still been a big increase in the freedom of capital and trade.

Qin Jie said that the special area has formed a mature service guarantee system for major projects, and various measures have been introduced to ensure the efficient implementation of key projects.  However, the perception of SMEs still needs to be improved, and there is still a certain gap between SMEs and large enterprises in obtaining high-quality services.

The special area has created a high-quality domestic service guarantee, but there is still room for improvement in the openness of cross-border operations, especially when compared to Singapore and other similar places.  The quality of public services in the special area has improved significantly, but the attractiveness of the region needs to be further improved.