(Singapore, April 13, 2023)Singapore will be the world’s best business environment over the next five years while China is called “biggest loser globally” according to a business environment rankings that were released today by the Economist Intelligence Unit.

The rankings report, which measures the attractiveness of the global business in 82 countries and regions on a quarterly basis, illustrates the impact on global operating environments of the war in Ukraine, the ensuing spike in inflation and cost of living crisis and the current combination of fiscal loosening, monetary tightening, and an economic slowdown, the EIU ranking report says.

Source: EIU

According to the report, Singapore will retain the world’s best business environment in the forecast period, with Hong Kong, New Zealand, Australia, Taiwan and South Korea also ranking in the global top 20.

As a region, Asia’s score for policy towards foreign trade is improving. This partly reflects the impact of regional free trade agreements adopted in the past five years, the effects of which will be felt in our five-year forecast period till 2027, the report says.

However, “China is our biggest loser globally, falling by 11 spots in the second-quarter rankings compared with a year earlier”, the report says.

Source: EIU

Although the end of the zero-covid policy is positive for firms operating in China, regulatory changes stemming from the statist direction of economic policy as well as rising local costs weigh on its business environment and limit opportunities for international investors.

Elsewhere in Asia, the countries that have improved their ranking the most over the past year are Vietnam, Thailand, and India – all ahead of China.

Vietnam is an overall biggest mover worldwide, climbing 12 spots in the rankings, while Thailand improves by ten places and India by six.

Vietnam and Thailand, which have favorable policies for foreign investors, are benefiting from firms pursuing a policy of having supply chains in both China and another Asian market.

“This reflects China’s zero-covid policies, which have constrained business operations, and also allows firms to mitigate geopolitical risk associated with the US-China relationship”, the report says.

Vietnam’s score rises on the back of an improving economic outlook, and Thailand’s because of greater economic stability. India has historically struggled to attract manufacturing investment but is now well placed to benefit from similar trends.

“Policy reforms are making it easier to do business in India, and we expect major improvements in areas such as infrastructure, taxation and trade regulation, boosting investment,” the report says.

The BER uses a standard analytical framework with 91 indicators.