New Chinese Energy and Resource Tax to Help Appease Tibet and Xinjiang

NTD TV, 12 October 2011

On Monday, Chinese officials announced a nationwide energy and resource production tax that will benefit local populations. It’s likely a move to appease protest-prone Xinjiang and Tibet, where much of China’s oil is produced. The tax, which becomes effective beginning November 1st, will affect crude oil, natural gas, rare earths, salt and metals. Oil and gas will be taxed at 5-10% of sales value, which is expected to help Xinjiang raise from $615-$770 million a year. In resource-rich Xinjiang and Tibet, ethnic clashes occurred because locals had conflicts with state-owned energy and mining companies, who were profiting nicely from the auto-boom and increased price. Locals argue benefits often went to Han majority settlers from China, but failed to help native residents. China’s previous tax was based on volume rather than value, so the tax did not increase with profit. The new tax is seen by some as a PR move by the Chinese regime to defuse ethnic anger.