China’s economic freedom score is 52.7, making its economy the 139th freest in the 2015 Index. Its overall score is 0.2 point higher than last year, with modest improvements in freedom from corruption, business freedom, and labor freedom largely offset by declines in investment freedom and the control of government spending. China is ranked 30th out of 42 countries in the Asia–Pacific region, and its overall score is lower than the global and regional averages.
Over the past five years, economic freedom in China has improved by less than 1.0 point, continuing its patchy and uneven progress since 1995. The one bright spot has been an 8.1-point improvement in labor freedom since 2011. A restrictive residency permitting system remains in place, and gains in labor freedom have been largely offset by losses in other factors, including a 5.5-point decline in the control of government spending.
A more comprehensive set of economic reforms is desperately needed, especially a loosening of the government’s stranglehold on investment flows. The Communist Party’s control of all levels of government continues to undermine confidence in the rule of law and interfere with the development of an independent judiciary. Institutionalized cronyism is prevalent.