The number of foreign R&D centers in China rises with about 200 every year, the latest statistics of the Ministry of Commerce shows.

By the end of this June, a total of 600 foreign R&D centers in various forms have been set up in China. U.S., Japan, EU, Virgin Islands, Taiwan Province and HK SAR are major sources of the R&D funds. A total of 4 bln US dollars has been put into industries of electronics, telecommunication, transportations, medicine, chemical materials and productions.

With the apparent rise of high-tech industry's proportion within the entire industry, foreign investment more concentrates on high-tech industries, and industries with high added-values. In recent years, a lot of transnational corporations including IBM, Microsoft, Motorola, Siemens, Nortel, Dupont, GE, General Motors, Volkswagen, P&G, Honda, Hitachi have put up R&D centers in China in line with their global strategy.

China has made below policies to encourage foreign corporations' investment to establish R& D centers in China:

Import tariffs and import-stage taxes for self-use equipment and matching technology, parts and spares parts (the commodities specified in the Catalogue of No-Tax-Exemption Import Commodities for Foreign-invested Enterprises, vessels, aircraft, special kinds of vehicles and construction machinery are not included) shall be exempted, on conditions that value of such equipment and parts do not exceed the total amount of investment, and they are used only by laboratories that do not reach a production scale or fall into the scope of intermediate experiment. For technical renovation by way of using their own funds, imports of self-use equipment and matching technology, parts and spares within above mentioned scope of business shall be exempted from the import tariff and import-stage taxes; revenues obtained from transfer of self-developed technology shall be exempted from business tax; if the expenditure for technology development increases by over 10 percent (including 10 percent) than pervious year, then 50 percent of the actual amount of technology development expenditure can be used as tax payable for that year after approved by taxation authority.

By People's Daily Online