The State Council recently released its
Suggestions to Further Improve the Utilization of Foreign Investment
. It encourages a more optimal usage of foreign investment by promoting foreign investment in high-end manufacturing industries, high-tech industries, modern services industries, new energy and energy-saving environmental protection industries. Before the end of 2010, the importation of science and technology products needed by foreign-invested research and development centers, that meet specific requirements, will be exempt from customs duties, import VAT’s, as well as consumption taxes.
· Also the State Council believes that guiding foreign investment to the mid-west regions is necessary. This plan is laid out in the supplement
Catalogue of Dominant Industries for Foreign Investment in Mid-west Regions,
which mostly discusses labor-intensive projects. Preferential business tax policies will continue to apply to foreign and/or domestically-funded businesses.
Another important strategy is the promotion of diversifying foreign investment. The State Council has a goal of encouraging foreign investment by way of share acquisition, in the reorganization, restructuring, merger & acquisition of domestic businesses.