China to extend tax incentives to attract more foreign investment
China will extend the preferential tax policy for overseas investors. /CFP

China will extend the preferential tax policy for overseas investors. /CFP

China will extend its preferential tax policy for overseas investors in the mainland bond market as part of efforts to promote opening-up and attract foreign investment, the State Council said after an executive meeting chaired by Premier Li Keqiang on Wednesday.

"We will make greater efforts to attract foreign investment and welcome overseas investors to our bond market on the mainland," Li said in a statement.

The Council said China will continue to expand opening-up, leverage the strengths of its big domestic market and foster a more enabling business environment. It was decided that more will be done to encourage more foreign investors to participate in China's domestic development through the bond market.

The meeting decided that the policy to exempt overseas institutional investors from corporate income tax and value-added tax on their bond interest gains arising from investment in the mainland bond market will be extended till the end of the 14th Five-Year Plan period in 2025.

Competent departments shall go through the record-filing process with the Standing Committee of the National People's Congress in accordance with laws and regulations and, in the meantime, strengthen market regulation and curb irregularities such as excessive speculation and market manipulation.

"We should respond proactively to the concerns of market entities, effectively conduct cross-cyclical adjustments and anchor market expectations to help enterprises survive and thrive," Li said.

SMEs and coal-fired power companies

In addition, the country will defer tax payment for small and medium-sized enterprises (SMEs) in the manufacturing sector to ease the impact of rising costs, according to the Council.

The decision would in effect defer around 200 billion yuan ($31.32 billion) of tax payment for manufacturing SMEs, it was revealed.

The country will also defer tax payments of around 17 billion yuan for coal-fired power companies and heating firms to ease operating difficulties.

Source(s): Xinhua News Agency

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