The Chinese government has removed the minimum-capital-limit required for registering a company. This is cuts the red tape that bogged down entrepreneurship, improving the prospects of innovative businesses flourishing in the Chinese economy.
Previously, entrepreneurs wanting to start a business in China had to have a set amount of capital before they were allowed to register, a barrier that policy-makers have now decided is unnecessary. The minimum capital a business needed to start up ranged from 30,000 yuan for a limited liability company to five million yuan for a joint-stock corporation.
As these requirements were especially difficult for smaller businesses to get up and running, small to medium sized businesses should be most affected by the reform of these laws. Such businesses make up a large portion of the Chinese economy, especially in comparison to its neighbors, Japan and Korea.
What do experts think about these new reforms? How will these reforms affect the Chinese business environment?
Ni Hao, you're listening to People In the Know, bringing you insights into the headlines from China and around the world; I'm Zheng Chenguang in Beijing.
Nathan Wakelin-King speaks to Professor Denis Wang from the Chinese University of Hong Kong Business School, and Prof. Yin Xingmin, Vice Director of the China Center for Economic Studies at Fudan University in Shanghai.