国际英语新闻：Foreign, Chinese firms' tax burdens unified

BEIJING, Dec. 1 (Xinhuanet) -- China is levying two taxes on foreign companies, marking the beginning of a standard national tax treatment for foreign and Chinese enterprises.

China will charge foreign firms with operations here two additional taxes (a construction tax and education surcharge) in a measure taking effect Wednesday, according to a State Council announcement in late November.

The measure makes most of the taxes imposed on domestic and international companies equal. But it also means foreign enterprises' expenditures on local operations will rise by up to 10 percent.

Analysts said the effect on foreign investors is limited, and they must adapt to the new situations in China and regard it as a market rather than just a low-cost production center.

"I don't think this will exert any negative effect on the growth of foreign direct investment (FDI) in China, given China's robust economic growth and increasing domestic consumption, which will steadily help the market maintain its appeal to foreign businesses," said Wang Zhile, director of the research center on multinationals under the Ministry of Commerce.

Ding Yifan, economist of the State Council's Development Research Center, agreed with Wang and said that in addition to tax policies, many other factors - including consumption-market size, labor resources and economic growth - could determine a nation's attraction as an investment destination.

"The measure itself will help to create a fair tax environment for companies at home and abroad," he said.

Early on in its reform and opening to foreign enterprise, China launched super-preferential tax policies for international companies in a bid to propel its economic growth, and the internationals were exempt from some taxes. Over the past few years, the preferential policies have gradually been phased out.