Good business environment key to attracting foreign investment

DOWNWARD PRESSURE has prompted some emerging market economies, including India, Thailand and Vietnam, to cut tax on enterprises so as to attract more foreign investment. Beijing Youth Daily comments:

India has reduced its business income tax rate for manufacturing enterprises founded after Oct 1 to 17 percent, compared with China's 25 percent. And Thailand has reduced the tax burden on manufacturing enterprises relocated to it from China by 50 percent.

Apparently, the continuously worsening international trade conditions and "synchronized" slowdown of 90 percent of economies as highlighted by the International Monetary Fund have forced the emerging markets to resort to the remarkable tax abatement to attract foreign capitals. These tax measures have instantly improved their appeal to foreign businesses in their contest with China. They, including China, are in a dire need of foreign companies, particularly those in advanced manufacturing, to not only boost their growth, but more importantly, accelerate their industrial upgrading and economic restructuring.