China Offers Tax-Breaks To Spur Investment In West

by Mary Swire, Tax-News.com, Hong Kong

21 September 2001

At the Sixth World Chinese Entrepreneurs Convention held this week in Nanjing, capital of east China's Jiangsu Province, Zeng Peiyan, minister in charge of China's State Development Planning Commission, said that China would adopt a series of preferential measures to encourage overseas investors to start up businesses in its western areas.

Income tax for many enterprises in the west will be reduced by 15% as compared to the national headline rate, and overseas investors in transport, electric power, water conservation, postal services, and TV broadcasting will be exempt from income tax altogether in the first two years. Imports of high technology equipment for many key projects in the western areas will also be exempt from customs tariffs and some other taxes.

Certain key sectors including banking, insurance, tourism, accounting, engineering, and telecommunications will be opened to overseas investors earlier than required under the country's WTO accession agreement, Zeng said, adding that his announcement was just a foretaste of many other preferential measures still to come.

With an enormous market potential and a constantly improving social environment, Zeng claimed that China is becoming the most attractive destination for world investors.

The measures are partiicularly targeted at the worldwide Chinese diaspora, which has enormous assets the Chinese government would like to see put to work in China itself, althoughy of course under WTO rules any incentives have to be available to all investors.

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