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People's Daily Online>>China Business

Govt tries to soothe foreign companies' concerns

By Ding Qingfen and Li Jiabao (China Daily)

08:13, November 29, 2011

BEIJING - Foreign enterprises doing business in China are enjoying many preferential investment policies compared with their domestic counterparts, said Vice-Premier Wang Qishan on Monday.

"In many sectors, the treatment provided for foreign businesses are still better than those for Chinese domestic companies," said Wang, responding to complaints by foreign companies about the investment environment in China. "If there was anything the Chinese government could improve, it could be market access."

Over the last three decades, foreign businesses have enjoyed preferential policies including lower taxes and cheaper land and resources compared with domestic players, Wang told member companies of the China Association of Enterprises with Foreign Investment.

"China is in a transition period, changing the super national treatment to the national treatment on a gradual basis," said Wang.

Starting December 2010, China began to levy a surtax for municipal maintenance and construction and an education surtax for foreign enterprises, which signaled unification of the tax system among companies from home and abroad.

But in line with a regulation to encourage foreign investment issued by the State Council in April 2010, some foreign-funded firms still enjoy preferential treatment ranging from lower land prices to more favorable policies for setting up high-tech companies.

Despite their complaints, Wang said foreign enterprises are more and more concerned about the soft business environment in China, including its "legal system and governance, fairness and transparency".

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