China Daily Global Edition (USA)
Vital to lower institutional costs
When meeting a delegation of business leaders from the United States in Beijing on Tuesday, Premier Li Keqiang said China will gradually expand its market access and further optimize its business environment to raise the competitiveness of the country’s economy. Li’s remarks came only days after he stressed in a teleconference that the business environment is a productive force and local governments should transform themselves from the suppliers of preferential policies into the creators of a fair business environment.
It is under the persistent efforts of the central government that China’s business environment has improved in recent years.
According to the World Bank’s report, Doing Business 2017: Equal Opportunity for All, China has risen 18 places over the past three years in terms of its business environment, and in terms of how convenient it is to start a business, China has moved up 31 places among other global economies.
Yet despite the improvements, China’s business environment still lags behind not only the developed but also many developing economies, as Li pointed out.
It is not difficult to understand the importance of such traditional factors of production as technology, labor and land.
However, the business environment is not only a factor of production, but also one that is “non-substitutable”, which means particular efforts are needed to release productivity through optimizing the business environment to raise a country’s entire production efficiency and promote its healthy economic and social development.
To optimize the business environment means, essentially, lowering the institutional costs for economic activities.
Institutional obstacles and the lack of good institutions are holding back China’s economic development. More important, only a well-designed institutional environment can ensure the other factors of production play their roles to the maximum. Published by: Tel: Fax: Subscription: Advertising: Printed by:
found guilty of running a website that helped online shops falsify the number of transactions they made in order to fool people into believing they were trusted by consumers. That is the first time someone has been punished for this kind of crime in China. Beijing News comments:
The man was found guilty of “illegal trading”, as well as “violating the personal information of citizens”.
Such deeds should be punished because they are a type of fraud and ruin the normal order of online retail. With the help of such people, the shops that provide bad products and services cannot be eliminated from the market, due to a lack of customers.
Worse, a complete interest chain has already been formed. Data show that there were at least 680 enterprises conducting such activities in 2014, making an estimated revenue of more than 200 billion yuan ($29.2 billion) that year.
However, there has been hardly any judicial penalty for those falsifying the data. Many online trading platforms simply correct the data if their falsehoods are uncovered.
Last December, when online trading platform Alibaba sued shatui.com for falsifying its data, it was found that the latter had already been punished by a local government for the same misdeed, and the penalty it received was just a fine of about 100,000 yuan.
That is why the latest ruling is significant, as it sets a precedent of judicial punishment for those professionally falsifying data on online retailers’ transactions.
This will in turn boost the development of e-commerce, which is based on trust.