1. For manufac turing foreign capital enterprises, the tax rate for business income tax shall be redu ced to 24%. For foreign capital enterprises that are located in the Economy and Technology Development Zone of Chengdu or High and New Tech Development Zone of Chengdu (inclusive of Cross-Strait Technology Development Park of Chengdu) and recognized as high and new technology manufacturing enterprises, the tax rate for business inocome tax shall be reduced to 15%.

2. If the foreign investors make investment in manufac turing projects that are encouraged by state industrial policies, the tax rate for business in come tax shall be reduced to 15% within 3 years after the current tax preferences period.

3. Foreign capital enterprises that are located in High and New Tech Development Zone of Chengdu (inclusive of Cross-Strait Technology Development Park of Chengdu) or Economy and Technology Development Zone of Chengdu, which pay business income tax at a reduced rate of 15% and whose line operation period exceeds 10 years, business income tax shall be exempted within the first two years starting from the profitable year, and the tax rate shall be reduced 10% from the 3th year to the 5th years.

4. Foreign capital enterprises which are engaged in technology or know ledge-internsive projects, or which make an investment over USD 30 million and have a long payoff period, or which are engaged in manufacturing for energy and transportation projects, shall pay business income tax ata reduced rate of 15% upon approval byrelevant tax authority.

5. For manufacturing foreign captal enterprises whose line operation period exceeds 10 years, business income tax shall be exempted for the first two years starting from the profitable year, and the tax rate shall be reduced by half from the 3th year to the 5th year.

6. After the tax preferences period, the state-stipulated business income tax for foreign capital export enterprises shall be reduced by half if their production value of export products for the current year exceeds 70% of the total production value. For export enterprises that pay business income tax at of 15% according to relevant state regulations, the tax rate shall be reduced to 10% if they meet the afore-mentioned conditions.

7. For foreign capital bank, Sino-foreign joint venture bank, etc. that are located in Chengdu, if the invested capital or working capital transferred from the head bank to the branch bank exceeds USD 10 million and the operation period exceeds 10 years, business income tax rate shall be reduced to 15% uponapproval by relevant tax authority. And the business income tax shall be exempted for the first year starting from the profitable year, and the tax rate shall be reduced by half from the 2th year to the 3th years.

8. If the foreign investors of foreign capital enterprises use the profit obtained from the enterprises as additional share or investit to establish new foreign capital enterprises which are planned to run at least 5 years 40% of the paid business income tax for the re-invested value shall be refunded to the inves to rs upon approval by tax authority. If the new enterprises are engaged in high and new technology, or infrastructure projects such as highway, energy, water conservancy, civil and public facilities, or the development of agriculture, forestry, stockbreeding and fishery, and the operation period is at least 5 years ,the paid business income tax for the re-invested value shall be fullyrefunded to the investors.

9. For foreign companies, enterprises and other economic organizations which have no office or branch in Chengdu but eam income in terest on capital, inter rest on money, charter hire, chartered right use fee and others, the income tax rate shall be reduced to 10%.

10. If foregn capital enterprises make an increase in the expenses of technology development by 10% or more compared with previous year, upon approval by tax authority, 50% of the actual expenses of technology development shall be counted as paid business income tax for the current year in accordance with Administrative Methods on Pretax Deduction for Enterprises Technology Development Expenses formulated by the State Revenue Bureau. Regulations on Preferential Policies Encouraging Foreign Investment of Chengdu Municipal Government (brief)