Without rules that are fairly enforced, entrepreneurs have trouble starting and growing the small and medium-size firms that are the engines of growth and job creation around the world, the report said.

AmCham China, which represents more than 1,000 member companies, released a report in September in which its member companies cited ambiguous, overlapping, conflicting and irregularly implemented regulations as a key challenge facing their China operations. Also cited were discriminatory policies that favor domestic companies over foreign firms.

The European Union Chamber of Commerce in China has called for a balance between government control and market forces for years.

But experts said China is on track for economic upgrading.

In general, the report counted 238 policy improvements, an increase of 18 percent from the previous year and the second-highest total since the recent financial crisis.

According to the World Bank Group report, Singapore and Hong Kong remain the two easiest places for small to medium-sized businesses to operate, and Malaysia achieved a top 10 ranking for the first time.

Economies that gained in the report included Russia, which climbed to 92nd from 112th a year ago, and Brazil, rising from 130th to 116th.