Abstract: Even with a surge of the scores of various indicators of Shanghai’s business environment in recent years, there lies still a gap compared with the world’s leading business environment cities such as New York and London. Under the new development paradigm, it has become particularly important for optimizing China’s business environment so as to expand and strengthen the market system promoted by domestic and international circulation. Our study shows that ：(1) Shanghai’s great progress lies in starting a business, getting electricity, and dealing with construction permits, even now still a headache, and the shortcomings lie in paying taxes, getting credit, protecting minority investors, trading across borders and resolving insolvency; (2) International comparison shows that ：1) Shanghai ranks higher in registering property and enforcing contracts; 2) New York and London have significant advantages in getting credit and resolving insolvency; 3) Singapore, Tokyo, Seoul and Hong Kong gain advantages in dealing with construction permits, paying taxes and protecting minority investors; 4) Berlin, Rome and Paris stand out in trading across borders. Accordingly, Shanghai should, for a better business environment, learn from the advanced international experience and practices in simplifying the approval process for credit and bankruptcy, refining the taxation system, strengthening intellectual property protection, combating commercial bribery, building a good political and commercial environment, and strengthening the institutional innovation of the free trade pilot zone.

Key words: business environment, international and domestic circulation, international metropolises, international comparison