Indirect concessions will be offered instead. For instance, FIEs may be allowed a faster rate of depreciation, tax exemption, deduction and rebate, and transfer of losses. Special reserve fund may also be set aside as an indirect means of support to FIEs. These methods are not bound by international taxation regulations and embody the principle of fairness in taxation. Breaking Regional Protectionism China's entry into the WTO will help eliminate regional protectionism and reduce the special privileges enjoyed by regional industries.
Local protectionism is a problem that has been bothering the central government for a long time.
WTO accession will provide the external force that can finally eliminate local protectionism and bring about fair competition. New interest groups have emerged in China in the wake of reform and opening up. These interest groups are obstructing China's further opening up. Entry into the WTO will bring in external forces to boost internal reform. This will help create a sound economic and political environment and usher in a new wave of reform and opening up.