Business Environment

4. Qualified scientists and technicians

Baotou has 136 identified research and development institutes, including eight national-level engineering and technological research centers, as well as more than 100,000 professionals and technicians.

Baotou is in the first group of national innovative cities, and has received eight successive awards as a National advanced city of scientific and technological progress.

There are 28 universities, colleges and vocational schools in Baotou.

Baotou has the best vocational education system in Northwest China, and can receive 100,000 students.

5.Preferential taxation policies enjoyed by foreign-funded enterprises in China

Income Tax

Income tax rate: The current rate of income tax imposed upon foreign investment enterprises is 33 percent, though set at the lower rate of 15 percent in special economic zones, national hi-tech industrial zones and national grade economic and technical development zones. In coastal regions and provincial capitals the rate is 24 percent.

Tax-reducing policy: Foreign investment enterprises may enjoy the benefit of business income tax not being collected during the first two years after the beneficial year; half-rate income tax may be imposed for the succeeding three years.

Foreign investment enterprises in central and western regions are encouraged by the State through five years' of tax reductions, with the possibility of a further three years' half-rate income tax thereafter.

Advanced-technology companies can be exempted from income taxes for two years; and are then subject to a half-rate income tax for the following six. Export enterprises enjoy a two years exemption and three years at half-rate.

Turnover Tax

From Jan 1, 1994, China started to implement a unified Value Added Tax, consumption tax and business tax for foreign invested enterprises while abolishing industrial and commercial consolidated taxes. Foreign enterprises and foreign invested enterprises are exempted from business taxes in technological transfers. If the foreign invested enterprise purchases equipment made domestically within the volume of total investment, there is a benefit of a refund of value added tax.

Import Tax

Tariff Rate: The Chinese government has lowered import tariff rates; the current rate is 12 percent and China's WTO accession will render the tariff lower, according to an agreed time line.

Tariff Exemption Policy for Equipment Imports: The importation of equipment for foreign or domestic-invested projects, which are supported by the State, is granted a tariff and import stage value-added tariff exemption. Provided that the foreign-invested product is subject to the Category of Encouragement, all equipment imported for its use within the aggregated investment is exempted from tariff and import-stage value-added taxes (unless the project comes under the heading of those not entitled to Tariff Exemptions). The policy’s purpose is to expand the use of foreign investments and to encourage an influx of foreign technology to maintain a developing domestic economy.