ANNOUNCEMENT 28 Jan 2011

January 28th, 2011 - The Chinese government announced the broadening of a support scheme for a specific sector.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 1 neutral
  • 0 liberalising

SOURCE

PRC National People's Congress, January 28th, 2011. (国发〔2011〕4号 国务院关于印发进一步鼓励软件产业和集成电路产业发展若干政策的通知)
http://www.gov.cn/zwgk/2011-02/09/content_1800432.htm

Inception date: No inception date

State aid, unspecified

On January 28th, 2011, the Chinese State Council released Guofa 2011/4 (hereafter, the 'New Policy'), which renewed and expanded some of the preferential treatments first implemented ten years prior in Guofa 2000/18 (hereafter, the 'Old Policy').

The New Policy applies to the software and Integrated Circuit (IC) industries. Support measures for the software development industry were unchanged from the Old Policy.

The changes in the New Policy pertinent to IC firms are summarised below.

  • IC manufacturers with official recognition as such manufacturing ICs with a gauge of ≤0.8μm will be eligible for corporate income tax (CIT) exemptions for two years after their first profitable year, then 25% thereafter (the usual rate is 50%);
  • IC manufacturers either producing ICs of ≤25nm OR have investments totalling USD 1.22bn (CNY 8bn) or more to pay 15% CIT. If the firm has been in operation for 15 years or more, it is exempt from CIT payments for five years after its first profitable one, then 25% for the five years after that;
  • 'Key' IC manufacturers (as designated by the Chinese State) eligible for emergency 'support' to deal with temporary cash flow issues;
  • Expansion of import duty exemption for products related to IC manufacturing (see related measure).

There were several other procedural support measures detailed in the New Policy which were present in the Old Policy, but with more detail provided.

The GTA treats top-level announcements such as this one from the Chinese State Council such as this as an amber intervention, as the details of their enaction are provided from the specific ministries tasked with implementing the policies at a later date - please see related acts for information on the implementation of the policies.

The New Policy was supplanted in 2020 with a renewed version, please refer to the related act for information on this.

AFFECTED SECTORS