Clearer rules and regulations will attract more investments in opportunities arising from China's economic transition, said Dennis Nally, chairman of professional services group PriceWaterhouseCoopers International Ltd.
He added that the sooner the Chinese government can provide certainty and clarity, the sooner businesses will gain the confidence to make investments.
"When there are unclear issues out there, whether it is regulation, taxes or rule of law, businesses and investments will move to where there is more certainty," Nally said.
Despite these issues, Nally said that China is still attracting significant global interest for investment.
He noted that the country still retained attributes that attracted foreign direct investment, such as an emerging middle class.
Nonetheless, a PwC report stated that China lost its spot as the most important overseas growth market for the U.S. economy and was relegated to second place.
In November last year, Nally pointed out that the 29-square-kilometer Shanghai Pilot Free Trade Zone is a "good example" about how governments can be clearer with regard to rules and regulations.
Officials promised that the zone will provide easier access for foreign businesses, fewer government controls over business activities, and greater financial openness when it was launched in Sept.2013.
Nally noted that at the top of the minds of senior executives in the Asia-Pacific region, according to a PwC 2014 survey, is continued pressure for margin and the increasing cost of compliance with regulations.
"If you don't have certainty over how things are going to be dealt with, it creates uncertainties, and very cautious behavior--that is not good for investment and job creation," said Nally.