By comparison, the income tax rate for foreign businesses is 15 percent in the special economic zones, 24 percent in the coastal areas and 33 percent in other areas, it was reported by China News Service.

The head of the Comprehensive Planning Group under the State Council's West China Development Leading Group Office said that autonomous regions inhabited by minority nationalities in the west would be authorized to offer even more preferential treatment and could decide independently to further reduce the tax rate to 5 percent or even to zero.

The official said that the Chinese government's goal for developing the west is to gradually narrow the gap between people's incomes in different regions.

Western China covers 71 percent of the 9.6 million square kilometers (3.7 million square miles) of China's territory and hosts a population of 360 million, accounting for only 28 percent of the total population. The gross domestic product per capita is US$500, which is lower than the national average of US$840 and far lower than the US$1,200 in the coastal areas, US$3,000 in Beijing and the more than US$4,000 in Shanghai.

(China Daily 08/28/2001)