On July 27, the Chinese government extended certain tax incentives granted to both domestic and foreign-invested companies invested in China's Western Regions. This action, effective as of January 1, 2011, was announced in the Chinese government's tax notification titled Cai Shui [2011] No. 58 and extends and clarifies the incentives outlined in Cai Shui [2001] No. 202, which expired at the end of last year. According to Cai Shui [2011] No. 58, companies invested in encouraged industries in the Western Regions are entitled to a reduced corporate income tax rate of 15%, compared with the standard rate of 25%, from 2011 to 2020. Companies established prior to December 31, 2010 and engaged in transportation, power, water conservation, postal service, and radio and TV broadcasting industries, may continue to enjoy the "Two Free/Three Half" treatment, i.e., paying no corporate income tax for the first two years and half of the income tax for the following three years. Moreover, imports of equipment for internal use in the encouraged investment projects are exempt from tariffs.