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For over twenty years, China has encouraged foreign investment by charging foreign corporations a tax rate as low as 15% while local businesses had to pay 33%. After mounting complaints from Chinese companies, the country's legislature has changed the law to charge a single rate of 25% to foreign and domestic companies. According to analysts1 at JP Morgan, Chinese banks will benefit the most from the change, with their value going up 3% for every 1% cut in the income tax. Legislators also hoped to decrease the practice of moving money out of China and then back in just to take advantage of the tax break. Although the new law goes into effect in 2008, some foreign companies may not be affected2 for five years.
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1 analysts | |
分析家,化验员( analyst的名词复数 ) | |
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2 affected | |
adj.不自然的,假装的 | |
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