China urgently needs to level playing field, improve fairness for all firms, survey says

Transparency in governance and market demand declined between 2019 and 2022 in mainland China, according to a survey of over 2,000 companies, amid a new push by Beijing to crack down on industry barriers and protectionism.

Respondents to the “China’s Provincial Business Environment Index 2023 Report” said governance transparency, availability of human resources, demand and supply in markets and intermediary services had deteriorated.

The survey of 2,295 mainland China-based companies, conducted by National Economic Research Institute in 2022 and the first quarter of 2023, has previously been released every three years since 2006.

“This shows that there is an urgent need to improve the fairness of market competition. Governments at all levels should treat private and state-owned enterprises, large and small enterprises fairly, and should not favour one over the other,” said the survey published by the Beijing-based think tank on Wednesday.

“Local governments should also not adopt local protection policies to exclude or discriminate against non-local enterprises.”

The survey also cited feedback from some respondents who had dealt with local governments, including officials who did not fulfil contractual agreements and were not engaging with businesses.