The State Council has recently promulgated the Policy Initiatives for Implementing the Guidelines on National Medium- and Long-Term Plan for Science and Technology Development (2006-2020), outlining a total of ten policy initiatives.

The policy initiatives cover the following areas: investment in technology, tax incentives, financing support, government procurement, introduction and revamp of technology, creation and protection of intellectual property rights, building professional teams, education and popular science, bases and platforms for technological innovation, as well as strengthening coordination.

In the area of tax incentives, enterprises will be allowed to deduct 150% of their actual technological development expenditure from their taxable amount in the current year. In the case where full deduction cannot be made in the current year, the remaining amount can be deducted over a period of five years in accordance with tax laws. Moreover, if an enterprise's staff education expenditure accounts for less than 2.5% of its total taxable staff salaries, it can be deducted from the enterprise's corporate income tax.

In addition, upon approval by the authorities, newly-established new- and high-tech enterprises in state-level new- and high-tech development zones can enjoy exemption from corporate income tax for two years starting from their first profit-making year. Thereafter, a reduced 15% corporate income tax will be levied.