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Chinanews, Beijing, Apr. 4 – Officials from the Dalian Economic Development Zone on Tuesday denied the report that it had given one billion US dollars of subsidies1 to Intel.
After Intel has decided2 to invest 2.5 billion US dollars in Dalian, Liaoning Province, some people are concerned about the possible hidden agreements behind this project. Recently, Bob Johnson, an analyst3 from the global market research company Gartner, said that Intel might have got 1 billion US dollars from the Chinese government for the project. The allegation was soon denied by officials from the Dalian Economic Development Zone. On Tuesday, director of the Dalian Economic Development Zone Management Committee Zhang Jun told a reporter from the China Business News that the allegation was “absolutely nonsense.” “When did the Chinese government allocate4 so much money to a foreign-funded project? This is stuff and nonsense!” he said. Zhang said that as far as he knew, the Chinese government had not given any financial support for the project. He said that although the two sides had experienced a hard time during the negotiation5 process, Intel actually had not demanded an exorbitant6 price for it. On the contrary, it gave a lot of considerations to make sure that the investing project did not run counter to Dalian’s urban development plan. For instance, Intel once asked whether the location of the construction site of the project would destroy some relic7 sites in Dalian. On March 26, Dalian city mayor Xia Deren also declared on a public occasion that compared with other investing companies in Israel and India,the preferences that Dalian government gave to Intel on this project were “pretty much limited.” However, he admitted that since Intel’s investment project was closely related with China’s key industrial development strategies, Dalian city government did offer some preferential treatment to Intel. Such preferences are all in line with China's No.18 document, said Mayor Xia. In 2000, the State Council issued the No.18 document which sets a sequence of preferential policies for promoting the development of software and integrated circuit industries. According to this document, when a company’s actual tax amount exceeds 3% of the standard value-added tax rate, China will refund8 the premium9 part. Apart from this preferential policy, Intel was very much impressed with the high working efficiency displayed by the Dalian city government and the Chinese participants in the project, which helped it to make its final decision to invest in Dalian, Xia added.
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