But the present preferential policies will remain for the next few years, government officials said at a seminar devoted to the revision of China's legal system to meet the requirements of the World Trade Organization (WTO).

"Some worries from foreign-funded firms that the present preferences they enjoy now will be cancelled after China joins the WTO are unnecessary," said Li Ling, director-general of the Department of Treaty and Law with the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) on Tuesday during the Fifth China International Fair for Investment and Trade.

"Giving national treatment to foreign-invested enterprises means that they will enjoy the same treatment as domestic businesses and we will direct both businesses from home and abroad to invest in industries and regions China encourages with new preferences in the future," she added.

It was revealed that MOFTEC and other government organizations had been revising the present laws on Sino-foreign joint ventures, Sino-foreign co-operative ventures and solely foreign-funded enterprises.

There is talk of a unified foreign-funded enterprise law, which will revise existing restrictions on proportion of local procurement, foreign balance, and proportion of exports of their products.

A more bold choice may be the revision of the present corporate law so that requirements on FIEs are lifted, Li said.

Liu Changchun, an official from the Legislative Affairs Office under the State Council, also revealed that foreign co-operative businesses could find their local partners on their own rather than through designated intermediaries.

The office will also formulate regulations on anti-dumping, which will specify conditions for the launch of investigations, preliminary rules, and final rules. Preferential taxation, which has attracted much foreign investment, is another file to be revised.

"To bridge the differences between the taxes on domestic and foreign-funded firms will be a main task for us," said Shen Jiajun, a section head with the State Administration of Taxation (SAT).

According to Shen, SAT has been formulating a unified corporate income tax law, which may come out later this year or early next year.

He also revealed that China would draw up three individual laws on value-added, operation and consumption taxes. One of the major changes will be that the taxation scope of value-added tax will be extended to include more sectors.

The administration may also raise the value-added tax rates for those industries which need support from the government after the country's WTO entry. Rates on high-tech sectors will be reduced to encourage foreign investment.

FIEs should also be glad to hear that the vehicle use tax and urban real estate tax, which have incurred many complaints from joint ventures, will be cancelled.

The State Administration of Foreign Exchange is also busy modifying regulations on foreign exchange.

(China Daily 09/12/2001)