| Foreign Direct Investment (FDI) has been identified as an important factor having the potential to play a significant role in helping developing Economies in transition evolve toward a free market economy.;China has long been using tax incentives to attract FDI. The purpose of this study is to briefly examine the factors associated with this issue as identified in China.;This thesis presents a case study of tax incentives for attracting FDI in China by examining its laws and practices concerning the grant of tax incentives. This thesis analyzes the effectiveness of China's tax incentives in attracting FDI. It also focuses on the distorting effects of tax incentives on China's evolving market economy. The compatibility of China's tax policies with its obligations in international trade is also examined. This thesis concludes that, in the long run, the present tax incentives would not be to China's advantage, and may need further changes. It thus argues that China should reform its tax incentive policies, to bring its economy in line with the changing global trends in international trade. (Abstract shortened by UMI.). |
