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To: RealMuLan who wrote (53323)	9/13/2004 7:29:18 PM
From: RealMuLan	Respond to of 74559

"One of the fact is that the average loss margin of foreign enterprises in China amounted to 51~55 percent in 2003. Officials in China's State Bureau of Taxation hold that two-thirds of enterprises suffer losses due to a non-operational reason so as to shun from taxation. It is conservatively estimated the annual evasion volume of China's taxes on foreign enterprises amounts to RMB 30 billion. ... When the US Whirlpool and Shanghai Narcissus Electric Appliances Co., Ltd. set up a joint venture company in 1995, Shanghai Narcissus owned a 45 percent share of the joint venture company; but it sold a part of its share to the joint venture partner after the losses in two successive years, its share of the joint venture company dropped to 20 percent. The fate of an enterprise in Suzhou seems to be even more tragic. During its 7-year cooperation with the foreign partner, the losses of each year approached to RMB 100 million; as a result, the Chinese side did not make any profit, and almost all its share in the joint venture enterprises were sold to the foreign side. Of course, the eagerness for quick success and instant benefit that local governments in China show in their investment inviting, especially remising national benefits with favorable policies, has seriously violated the country's tax law by granting excessive tax-reducing preferential treatments, which has further pricked up foreign funds’plunders on the Chinese economy. Based on the measurement of the World Bank, it is more vivid to say that if various revenue preferential treatments can help China to attract 10 percent more foreign funds, i.e. with about US$ 3 billion more attracted each year, China needs to pay a price of US$ 5 billion for it. ..." en.ce.cn