General Steel Holdings, Inc. (General Steel), one of China's leading non-state-owned steel product manufacturers, has announced that the company's joint venture with Longmen Iron & Steel has been found eligible by China's National Development and Reform Commission (NDRC) for a tax rate reduction due to its investments in the western part of the country.
Accordingly, the corporate tax rate for the company will be reduced from 33 percent to 15 percent. Effective from July 1, 2007, this rate will be reflected in the company's reported third quarter financial results.
In order to promote development in western areas of China, the Chinese government is providing this type of tax incentive to companies investing in these areas.
Mr. Henry Yu, the CEO and chairman of General Steel Holdings said, "The central government has chosen the development of the western region as a key priority for national economic growth. One of the reasons we chose to partner the Longmen Group was its geographic location as a bridgehead point for development into the western region."
With three million mt of annual steel production capacity, General Steel produces rebars, hot rolled carbon and silicon sheet and spiral-welded pipe. The company has steel operations in Shaanxi Province (central China), Inner Mongolia Autonomous Region (northwest China) and in Tianjin municipality (northeast China).