The Fabricated High-Tech Boom
In order to promote technological innovation, three government agencies introduced the High-tech Enterprise Certification Management Policy (High-tech Policy) in 2008. The Ministry of Science and Technology (MOST), Ministry of Finance and the State Administration of Taxation jointly introduced a tax incentive policy to companies with a high-tech certification. From the standard 25 percent corporate tax rate, the tax for high-tech companies was slashed to 15 percent.
After the policy took effect, middlemen agencies that collected fees on the new application process sprouted across the country overnight. The number of agencies in Beijing reached 300, the most in the country. The Yangtze and Pearl River Deltas came in second to Beijing. A cottage industry emerged as a result of the policy adjustment, including accounting firms, law firms, intellectual property firms and various consulting firms. These firms offer professional services not only to handle the application process for high-tech companies, but also help fabricate conditions for clients to gain certification.
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