The Influence Of Foreign Direct Investment (fdi) Study Of Enterprise Income Tax Reform

With the development of economic globalization, the FDI has reached anunprecedented scale and becoming the most important way for boosting nationaleconomy. In China, after the opening-up policy, China has created a favorableenvironment for foreign direct investment and now it becoming the major factor foreconomy development. However, as the improving of national economy and change ofproduction mode, the problem lead by purely quantity pursuing and ignoring quality isbecoming obviously. In order to optimize the foreign investment and make it full serveour economy prosperity and provide a fair investment and development platform, TheLaw of the People’s Republic of China on Enterprise Income Tax has promulgate in Jan2008, and its lead to a significant achievement on China’s foreign capital introduction inthe following four years.This essay is based on empirical analysis and normative analysis and applied thehistorical data from The Law of the People’s Republic of China on Enterprise Income Taxto analysis how new policies effected on the quantity, quality and structure of FDI.The structure is divided into four parts. The first part is the description of researchbackground and its current situation. The next part is the theoretical basis on FDI and thereason for FDI and discusses the taxation influence on each aspects of FDI; it’s alsoincluding the tax incentive effects on FDI. The following part is the central of this essay,discussing the actual effects lead by enterprise income tax reformation, it is elaboratefrom three aspects:（1）FDI scale analysis, its conclusion is no affect on FDI scale basedon regression analysis from historical data before and after enterprise income taxreformation during15years.(2) FDI quality analysis, the analysis is covering differenttype of enterprises and countries.The result is that the number of production-orientedenterprises decline and state-encouraged enterprises increase; cost-focused countriesdecline and market-focused countries increase.(3) FDI structure analysis, it focus onindustrial and regional structure which is optimized The last part is the conclusion andanalysis of the whole essay, it suggest on enterprise income tax from perfection policyand investment environment, strengthen the anti-tax avoidance, the establishment ofmonitor and research system and make future reference for China’s FDI attraction.