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World Bank City Rankings: An Explanation
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At the China Investment Climate Forum that ran from November 11 to 12, the World Bank (WB) issued a 120 Chinese cities rank report on their competence.


The report says that considering indexes of the comprehensive investment climate, the government efficiency and the harmonious society, cities ranked at the top are Hangzhou (in Zhejiang Province), Qingdao (Shandong Province), Shaoxing (Zhejiang), Suzhou (Jiangsu Province), Xiamen (Fujian Province) and Yantai (Shandong) winning the "Golden Medal City" honor and the following 13 cities, namely Beijing, Dalian (Liaoning Province), Dongguan (Guangdong Province), Foshan (Guangdong), Fuzhou (Fujian), Guangzhou (Guangdong), Jiangmen (Guangdong), Ningbo (Zhejiang), Shanghai, Shenzhen (Guangdong), Tianjin, Weihai (Shandong) and Zhuhai (Guangdong) winning the "Silver Medal City" honor.


The report is based on an investigation covering all provinces except for Tibet Autonomous Region. As many as 1,200 working staff held face-to-face investigations with 124,00 enterprises, which is the largest for the WB on investigating the Chinese cities' status quo.


About 8 percent of the investigated enterprises are state-owned, 28 percent are with foreign capital involved and 64 percent are non-public ownership economy.


Government efficiency


The WB's Director for China and Mongolia David Dollar explained that although Shanghai is a well-known metropolis around the world, it doesn't rank at the top. After investigating 200 enterprises in Shanghai, the WB found that on average they spent 60 days each year communicating with the government and the average import and export clearance time is 8.7 days.


In Chinese coastal cities, like Dongguan, Jiangmen, Shenzhen, Qingdao and Zhuhai, the clearance time falls to three to four days; however, in cities ranking at the bottom of the list, including many northeastern and northwestern cities, enterprises have to spend about 20 days on the same clearance.


In Hangzhou, enterprises need eight days each year on average to communicate with the government. While in cities ranking at the bottom, three months are needed.


David Dollar said that government efficiency ranks according to the enterprises' tax and fee burden, government communication time, the proportion of small and medium-sized companies getting loans, customs clearance time, the loss of production value caused from electric power supply and transportation, the supernumerary rate, the staff's educational level, and proportion of the private owned enterprises.


Environmental quality


A city's clean air can reflect local people's living standards and governmental efforts on environmental management. Furthermore, a foreign businessman seldom invests somewhere with bad air quality and living environment, said David Dollar.


The report said the lowest standards for environmental protection in these cities are: at least 95 percent of all industrial waste have been disposed of according to relevant criteria; average green area per person should exceed 10 square meters; and the number of days with good and excellent air quality should be over 300 a year.


According to the investigation, among 120 cities, 100 percent of the industrial wastes in Qingdao Weihai and Yantai are disposed of; Mianyang (Sichuan Province) and Jinan provide the largest green area for each person, at 30 and 28 square meters respectively; Huizhou (Guangdong), Yantai, Weihai and Zhuhai have all year round good air quality. Comparatively, cities at the bottom of the list, especially in the central, west and northeast China, hold at 80 percent, 4.4 square meters and 218 days respectively.


Citing Guangdong as an example, David Dollar said that China has made great achievements in the recent 10 years in managing environmental pollution. Most cities in Guangdong already have similar strong basic installations, for instance in terms of government efficiency, environmental protection, medical and sanitation service and education, collectively known as soft environment. This time the WB ranked the cities by judging them on their soft environments accounting for 75 percent of the mark, and 25 percent for the hard environment.


Cities in northeast, central China and west


The report says the northeast industrial base and the central and western parts show their advantages on high-level educated staff, cheap labor force and steady-going electric power supply. The local governments can improve their efficiency in one or two years by concentrated reform. Three to five years' continuing investment will change the educational, medical and environmental standards.


According to the newly appointed Vice President of the World Bank's East Asia and Pacific Region James W. Adams, these cities can learn from some advanced provinces such as Zhejiang, Jiangsu, Guangdong and Shandong. By improving government efficiency, increasing investor transparency and convenience, in a short period, the local governments can improve enterprises' efficiency by 25 to 35 percent, and gain a 15 to 25 percent increase from foreign investment.


WB experts suggested these cities make efforts on reducing the tax burden of domestic-funded enterprises and the total tax should account for 2 to 4 percent of the sales income; shortening government communication time to under 60 days; reducing customs clearance to three days; educating 15 to 20 percent of employees to technical education level or above; and ensuring that more than half of the small sized domestic-funded enterprises can get loans from banks.


(Xinhua News Agency, translated by Zhou Jing for, November 15, 2006)

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