Foreign investors in China's central regions can enjoy favorable tax policies set out in tax laws and regulations, said a senior official with the State Administration of Taxation (SAT).

SAT deputy director Wang Li told the First Central China Investment and Trade Expo in the capital of Hunan Province that if foreign investors reinvested the profits generated from their businesses in China in other enterprises in the country or incremented their registered assets for at least five years, the government would give a 40 percent rebate on the tax paid for the reinvested capital.

"If the newly-built businesses are export or high-tech companies, the tax paid for the reinvested capital will be totally rebated," said Wang.

Central China, comprising the provinces of Shanxi, Anhui, Henan, Jiangxi, Hunan and Hubei, is the country's major farm production base as well as an important base for energy, raw materials and manufacturing.

The development of central China's economy was considered key to opening the country wider to the world and achieving sustainable economic growth.

Wang also said China was poised to extend the valued-added tax (VAT) reform to some old industrial base cities that need to modernize outdated industrial projects.

The government launched the VAT reform experiment in the northeast region, including the provinces of Liaoning, Jilin and Heilongjiang, in July 2004.

(Xinhua News Agency September 29, 2006)