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5 White Paper on the Business Environment in China
over the past thirty years have created a market is able to be accomplished.6
economy framework that is “now rmly in place,” Not all are so pessimistic, however: “Li Jiange, chairman
this framework is also “incomplete, and that has led
to many problems including injustice,” and that “In of China International Capital Corp., [predicts that] General
the words of some Chinese government o cials, the Secretary Xi will introduce economic reforms in late 2013
current system is unbalanced, uncoordinated and to reduce Beijing’s role in the economy and break up state
unsustainable.”4 monopolies.”7
We furthermore highlighted a series of recommendations European Union Chamber of Commerce in China, Bei-
put forth by the U.S.-China Business Council in February jing President Davide Cucino commented (somewhat idealis-
2012 as areas likely to see measurable, concrete gains from tically) that “ e transition of power o ers the new leaders an
reasonable investments in time and attention: historic opportunity to quickly implement a decade of stalled
reforms that would allow China to shift its economy to a new
Ensure fair and open investment environments that stage of sustainable growth and towards a more inclusive,
create jobs. e United States and Chinese governments higher income society. is will not be an easy task, but we are
should jointly a rm the principle that foreign direct con dent that the new leaders will take bold moves because
investment is good for economic development, employment, they know that the required reforms are not only necessary,
innovation, competition, consumers, and public welfare. but now also urgent. In not doing so we see the risk of danger-
ous outcomes in the business environment.”8
Reduce investment ownership restrictions in China and
encourage Chinese investment in the United States. China But instead of speculating about various o cials’ attitudes,
has far too many ownership restrictions on US and foreign writes e Wall Street Journal’s China Real Time blog, “there is
investors seeking market access. More investment by Chinese a simpler way to test the Party’s seriousness [about reform]:
companies in the US means more jobs for Americans. Wait and see if the leadership makes a big move on the issue
of asset declaration by cadres after the 18th Congress.”2
Continue to use WTO cases to settle trade disputes.
Both countries have e ectively used this channel to resolve Watch Brother, Uncle House, Smashing
trade disputes in a non-politicized manner and should Black
continue to do so.
In August, a Shanxi provincial o cial earned the ire of the
Further improve rule-making transparency. China’s Chinese public on not one, but two counts. Time summarizes
central government has signi cantly improved rule- the events thusly:
making transparency over the past several years, but further
improvements are needed. China should fully implement its [On] Aug. 26, a long-distance bus carrying 37 pas-
commitment to publish all draft trade and economic-related sengers collided with a tanker loaded with highly
laws, administrative regulations and departmental rules for a
full 30-day period. ammable methanol on a Chinese highway in Shanxi
Province. Both vehicles burst into ames, killing 36
Eliminate duplicative and inconsistent payroll taxes. passengers.
e US and China should quickly move to ensure its respective
companies and employees are not required to pay payroll taxes Shortly after the tragedy, Yang Dacai, chief of the
(social insurance taxes in China) in both countries. Shanxi provincial work safety administration, was
caught grinning widely amid the wreckage. As Weibo
Adhere to non-discriminatory, mutually-bene cial users tried to gure out who this strangely smiley of-
innovation policies. China should continue to implement its
pledge to delink its innovation and government procurement cial was, pictures of Yang wearing luxury watches
policies. is issue impacts the level playing eld for American went viral. […] Yang was quickly dubbed ‘the smiling
companies in the China market, but also impedes China’s brother,’ and his laughing visage became September’s
goal of becoming a more innovative economy.5 most comical Internet meme.
Some scholars worry that intra-party competition and […]
some groups’ concerns may limit the speed with which reform
One day after the Shanxi accident, Sina Weibo users
12 posted ve photos of Yang wearing ve di erent luxu-
ry watches, including a $63,000 Vacheron Constantin
and a $10,000 Rolex. Many netizens questioned how
over the past thirty years have created a market is able to be accomplished.6
economy framework that is “now rmly in place,” Not all are so pessimistic, however: “Li Jiange, chairman
this framework is also “incomplete, and that has led
to many problems including injustice,” and that “In of China International Capital Corp., [predicts that] General
the words of some Chinese government o cials, the Secretary Xi will introduce economic reforms in late 2013
current system is unbalanced, uncoordinated and to reduce Beijing’s role in the economy and break up state
unsustainable.”4 monopolies.”7
We furthermore highlighted a series of recommendations European Union Chamber of Commerce in China, Bei-
put forth by the U.S.-China Business Council in February jing President Davide Cucino commented (somewhat idealis-
2012 as areas likely to see measurable, concrete gains from tically) that “ e transition of power o ers the new leaders an
reasonable investments in time and attention: historic opportunity to quickly implement a decade of stalled
reforms that would allow China to shift its economy to a new
Ensure fair and open investment environments that stage of sustainable growth and towards a more inclusive,
create jobs. e United States and Chinese governments higher income society. is will not be an easy task, but we are
should jointly a rm the principle that foreign direct con dent that the new leaders will take bold moves because
investment is good for economic development, employment, they know that the required reforms are not only necessary,
innovation, competition, consumers, and public welfare. but now also urgent. In not doing so we see the risk of danger-
ous outcomes in the business environment.”8
Reduce investment ownership restrictions in China and
encourage Chinese investment in the United States. China But instead of speculating about various o cials’ attitudes,
has far too many ownership restrictions on US and foreign writes e Wall Street Journal’s China Real Time blog, “there is
investors seeking market access. More investment by Chinese a simpler way to test the Party’s seriousness [about reform]:
companies in the US means more jobs for Americans. Wait and see if the leadership makes a big move on the issue
of asset declaration by cadres after the 18th Congress.”2
Continue to use WTO cases to settle trade disputes.
Both countries have e ectively used this channel to resolve Watch Brother, Uncle House, Smashing
trade disputes in a non-politicized manner and should Black
continue to do so.
In August, a Shanxi provincial o cial earned the ire of the
Further improve rule-making transparency. China’s Chinese public on not one, but two counts. Time summarizes
central government has signi cantly improved rule- the events thusly:
making transparency over the past several years, but further
improvements are needed. China should fully implement its [On] Aug. 26, a long-distance bus carrying 37 pas-
commitment to publish all draft trade and economic-related sengers collided with a tanker loaded with highly
laws, administrative regulations and departmental rules for a
full 30-day period. ammable methanol on a Chinese highway in Shanxi
Province. Both vehicles burst into ames, killing 36
Eliminate duplicative and inconsistent payroll taxes. passengers.
e US and China should quickly move to ensure its respective
companies and employees are not required to pay payroll taxes Shortly after the tragedy, Yang Dacai, chief of the
(social insurance taxes in China) in both countries. Shanxi provincial work safety administration, was
caught grinning widely amid the wreckage. As Weibo
Adhere to non-discriminatory, mutually-bene cial users tried to gure out who this strangely smiley of-
innovation policies. China should continue to implement its
pledge to delink its innovation and government procurement cial was, pictures of Yang wearing luxury watches
policies. is issue impacts the level playing eld for American went viral. […] Yang was quickly dubbed ‘the smiling
companies in the China market, but also impedes China’s brother,’ and his laughing visage became September’s
goal of becoming a more innovative economy.5 most comical Internet meme.
Some scholars worry that intra-party competition and […]
some groups’ concerns may limit the speed with which reform
One day after the Shanxi accident, Sina Weibo users
12 posted ve photos of Yang wearing ve di erent luxu-
ry watches, including a $63,000 Vacheron Constantin
and a $10,000 Rolex. Many netizens questioned how
