China's tax deferral policy boosts foreign reinvestment in 2024

Foreign reinvestment in China benefiting from a preferential policy to temporarily exempt certain profits obtained by overseas investors from withholding income tax have seen rapid growth in 2024, data from the State Taxation Administration revealed on Feb 20.

The total value of reinvestment reached 162.28 billion yuan ($22.63 billion) in 2024, a 15 percent increase from the previous year, hitting a record high.

China has previously deferred withholding income tax on profits that were distributed to overseas investors by resident enterprises in the country and directly reinvested in domestic projects and sectors.