Income Tax Preferences to Foreign Investment in China since the Late 1970s


In this thesis, I analyze the underlying causation of changes to China's income tax preferences for foreign investors. This thesis is divided into five parts. Part II discusses the permissible investment forms for foreign investment in China. Part III provides an overview of the current status of income tax in China applicable to foreign investors. Part IV introduces the tax bilateral treaties that China has entered into. Part V analyzes the causes of China's international income tax preferences, from the perspectives of politics, economics, and international investment competition. Part VI analyzes the implications of China's'income tax preferences on the amount and type foreign investment, particularly the impacts of the unequal tax treatments towards the foreign investors and domestic investors, and the tax revenues losses on both China and those capital-exporting countries. Part VII predicts potential changes in Chinas income tax preferences for foreign investors.