Bridging News
Read in APP

Tax-Deferred Policy Drives 253% Surge in Foreign Reinvestment in Chongqing in 2024

By Bridging News
Economy 2025-03-04
Share:

Chongqing- Foreign reinvestment in Chongqing grew by 253% year-on-year in 2024, with 3.94 billion yuan (about USD 541 million) benefiting from the tax-deferred policy, according to data released by the Chongqing Municipal Tax Bureau on February 28. This marks a key milestone for the region's economic growth.

The foreign reinvestment deferred tax policy allows foreign investors to temporarily withhold income tax when profits are distributed from domestic resident enterprises in China and reinvested into local projects and sectors. This tax incentive has become a key driver for attracting foreign capital into China's emerging industries, particularly in Chongqing, a growing hub for international investment.

The Corning Display Glass Factory is located in Chongqing Liangjiang New Area. (Photo/Corning)

Corning Display Technologies (Chongqing) Co., Ltd., based in Liangjiang New Area, is one of the companies benefiting from this policy.

"Thanks to the tax deferral policy, we have more capital to reinvest in Chongqing," said Daniel Tseng, President and General Manager of Corning Display Technologies China. "Corning's facility here is key to our global footprint, with Gorilla Glass now produced locally. We'll ensure the production line's stable operation to maximize value."

Staff from the Chongqing Municipal Tax Bureau present a cross-border e-commerce tax policy brochure to Chongqing Yuou Cross-border E-commerce Co., Ltd. (Photo/Li Wei)

Aside from the U.S., China is the only market where Corning operates across all five major business areas: display, optical communications, automotive, life sciences, and mobile consumer electronics, reflecting alignment with China’s industry priorities.

Tseng commended Chongqing’s dedication to fostering a market-oriented, legal, and international business environment. “We have confidence in the local environment, and Corning has prospered in Chongqing for nearly 10 years, thanks to the city’s initiatives to enhance the business climate, including robust intellectual property protections,” Tseng said.

“In 2024, foreign reinvestment in Chongqing spanned eight major industries. Among these,  capital market services and software/IT services showed significant growth, drawing reinvestments of 1.54 billion yuan and 100 million yuan, respectively,” noted Mo Qiling, director of the international taxation management department at the Chongqing Municipal Tax Bureau. 

Under the deferred tax policy, foreign reinvestment in China reached a record 162.28 billion yuan in 2024, reflecting a 15% increase from the previous year. Reinvestment from Belt and Road initiative co-building countries saw a remarkable 95.7% surge, with Singapore and South Korea increasing their contributions by 1.4 times and 66.5%, respectively. Japanese and U.S. investments also maintained steady growth, rising by 1.6 times and 26%, respectively.

Officials from the International Taxation Department of the State Administration of Taxation (SAT) noted that the range of industries receiving foreign reinvestment has become more diverse in 2024. Special equipment manufacturing and pharmaceutical manufacturing experienced significant increases, with reinvestment amounts growing by 1.3 times and 24%, respectively. The western regions of China, including Chongqing, also enjoyed faster growth, as foreign reinvestment in northwest and southwest China rose by 60.6% year-on-year.

Chen Binkai, Vice President of the Central University of Finance and Economics, credited China’s robust economic resilience and strong market appeal for the steady growth in foreign reinvestment. He emphasized that the continued tax-deferred policies will further enhance China’s "magnetic attraction," encouraging more foreign businesses to invest and flourish.
A+
A
A-
X