China has created a favorable environment for copyright-based industries in government procurement and taxation and will do more to encourage innovation.

Yan Xiaohong, vice-director of the National Copyright Administration, made the remarks yesterday on the sidelines of the International Copyright Forum, jointly hosted by the administration and the World Intellectual Property Organization (WIPO).

"We have already asked all governmental departments to use authorized operating systems and software. We will also encourage them to use more home-made software," he said.

Home-made software include those developed by foreign software firms that have registered copyright, paid taxes, and achieved 50 percent of added value in China.

Although major foreign software companies have yet to meet the criteria, the Chinese authorities encourage them to invest more in research and development in the country.

In terms of taxation, starting this year major domestic software enterprises with an annual income of more than 100 million yuan (US$12 million) or annual exports worth more than US$1 million, have to pay only 10 percent corporate income tax, instead of the standard 33 percent.

"A favorable taxation policy will encourage more investment in the software industry and will help companies lower costs," said Geoffrey Yu, deputy director-general of WIPO.

During the forum yesterday, a Chinese Enterprise Copyright Alliance was established as proposed by major Chinese IT firms including Shanda Interactive Entertainment Limited, Netease Group, Microsoft China and Sina Group.

(China Daily September 6, 2006)