The Evolution Of Tax Policy For Forign-invested Enterprises In China's Socialist Market Economy

5An import goal of China's economic reform, the construction of socialist market economy is a pioneering undertaking that combines the basic system of socialism with market economy and features equality, competition, rule of law and openness. In the course of building socialist market economy, tax policy is used by the government as a tool to intervene economic activities and norms in the market to some degree so as to achieve some specific economic and social development goals.The Party's tax policy for foreign-invested enterprises has seen an evolution from super-national treatment to national treatment as China's socialist market economy budded, took shape and now keeps improving. The goal of tax policy is to utilize foreign investment more effectively in fueling domestic economic growth, essentially a significant embodiment of using capitalism to develop socialism.With theoretical support, the evolution of China's tax policy for foreign-invested enterprises is an application and materialization of the theory on late-development advantage. Such an evolution not only meets with the objective requirements by the essence of socialism, namely to emancipate productivity and develop productivity, but also agrees with and advances along the developing theories of socialism market economy.Besides that, such an evolution of tax policy has been both necessary and feasible. First of all, it is required by China's basic economic system of keeping public ownership as the mainstay of the economy and allowing diverse forms of ownership to develop side by side that a tax policy offering foreign-invested enterprises national treatment should be adopted. Second, it is needed for improving the investment climate in China, using foreign investment and advanced technologies more effectively, and building China into an innovative country. Third, it is needed for our adaption to the economic globalization, as although China is now experiencing fast development, it can't isolate itself from other countries and their investment and technologies in such a globalizing world. Apart from its necessity, the evolution has been possible thanks to the correct guidance by the Party, the improved economic environment in China, the development of domestic enterprises as well as that of the international community, all of which have helped to provide the direction, conditions, circumstances and guarantee for the evolution of tax policy. The evolution has imposed certain influence on the government's taxi collection, domestic and foreign enterprises and the development of socialist market economy. First, a tax policy that gradually switches to national treatment will provide standards for tax collection, reduction and preference in a more unified way; second, it helps domestic enterprises to develop and improve themselves by leveling playing field; third, it encourages foreign enterprises to reform and improve, helps to raise the quality of foreign investment and is beneficial for China's economic development. But building socialist market economy is a long-term process. The evolution of tax policy from a favorable super-national treatment to the normal national treatment is not an end in itself, but rather another landmark in the history of China's tax policy that evolves along with the development of China's socialist market economy.