China Announces New Measures to Attract Investment
China has vowed to create a better business environment to stabilize the growth of the foreign direct investment.
Posted by Jian Ping Sun on Wednesday, 30th August 2017
The central government will increase the abilities of local development zones to attract foreign funds, strengthen the protection of intellectual property rights, make it easier for qualified foreigners to work in China, and equalize the financial policies for national and foreign enterprises, according to a news conference hosted by the State Council Information Office in Beijing on August 25.
Wang Shouwen, deputy minister of commerce, Zhang Jianguo, head of the State Administration of Foreign Experts Affairs, and Wang Jianfan, director of the tax department of the Ministry of Finance attended the event and introduced a document outlining the measures aimed at boosting foreign investment issued by the State Council, China’s Cabinet.
However FDI’s growth in the development zones dropped 9 % last year, governors noted. The development zones in west China and the old industrial bases in northeast China are expected to attract more foreign investment. Provincial governments can issue municipal bonds to support infrastructure construction and key projects in the development zones. Also, the development zones should improve their ability to provide auxiliary industries, they added.
Thirty-three development zones have piloted the centralized administrative licensing rights reform, which will be expanded to cover a wider scope to give the development zones more vitality. Last year, China paid US$24 billion in charges for the use of the foreign intellectual property. The expenditure has increased about 18 % in recent years, showing that China is increasingly respecting IPR protection, and China will continue to strengthen its IPR protection work.
Wang Jianfan announced that if foreign enterprises reinvest their money back into China, the profit they make in the Chinese market can be exempted from paying the 10 percent withholding income tax. The 15 percent preferential income tax rate for advanced foreign technologies and service enterprises will be expanded from the current 31 pilot cities to the whole country, in order to attract more foreign investment into the high added-value technology and service industries, Wang Jianfan emphasize.
To encourage more Chinese enterprises to go out, the Chinese enterprises’ overseas income tax rate will be lowered to the same level as their domestic income tax rate, according to Wang Jianfan.
Zhang Jianguo pointed China will soon implement a talent visa system to attract more than 50,000 foreign talents in the fields of high technology, trade and economics in the near future. The talent visa will be multi-entry visas valid for five to 10 years, and the visa holder’s spouses and under-age children can obtain visas with the same period of validity.
Editor: May Bird