The new change in the Chinese VAT system being trialed in the North-East is reducing considerably such burdens for business in the region,as it makes it less expensive for companies to upgrade their facilities,Applied nationally,it would provide a major incentive for prospective investors.

As part of a 2003 policy initiative on “Revitalising the northeast old industry bases”,on 14 September 2004 SAT and MOF jointly issued “provisions on expanding the qualifications of fixed assert input VAT deductions in the North-East region”(Circular 156),which gives more detailed rules on implementing the new VAT system.The region covered includes the three provinces of Heilongjiang,Jilin,and Liaoning,Including the port city of Dalian