|Package Encourages Investment in China's West(12/22/01)|
Domestic and foreign investors in the western regions will enjoy more favorable taxation policies for the next 10 years.
From 2001 to 2010, the enterprises' income tax should be levied at 15 percent if they invest in the industries that the government encourages, according to a package of preferential measures unveiled by the central government yesterday.
The long-awaited package of measures is aimed at stimulating more investors to get involved in pushing forward China's strategic campaign to develop its western regions.
The central government started the campaign at the beginning of 2001 to balance the social and economic development of the whole nation.
The rate of 15 percent is two percentage points lower than the tax rate for foreign investors in China's other regions, where domestic enterprises are taxed at 33 percent.
Moreover, governments of ethnic minority autonomous regions could provide further tax breaks if they get approval from the provincial government.
Apart from taxation, the package includes policies on finance, trade, land use and resources exploration and utilization.
Enterprises are encouraged to invest in infrastructure construction and industries such as agriculture, afforestation, water resources, transportation and the environment.
In the western regions, China will gradually open its service trade to foreign investors.
Foreign investors will be allowed phased-in investment in banking and retailing in the provincial capitals of the 12 provinces, autonomous regions and municipalities in central and western China.
The central government encourages Chinese and foreigners to jointly set up accounting agencies and law offices in the regions.
According to the measures, the State is also spurring enterprises in the western regions to actively expand foreign trade and the economy.
Enterprises with registered capital of 2 million yuan (US$240,000) can obtain rights to operate in the import and export trade. But in the past, the benchmark was 3 million yuan (US$361,000).
While inspiring foreign enterprises to finish infrastructure construction with Chinese counterparts, the State supports enterprises in western China that contract projects on the world market.
The State also invites Western entrepreneurs to expand their business in the countries and regions around China.
The State has been continuously implementing favorable border-trade policies according to international rules.
(China Daily December 21, 2001)