This article examines the 2017 progress report of the Inclusive Framework for BEPS Action Plans on China’s high- and new-technology enterprise preferential tax regime. It discusses the regime’s functional depiction of, rather than technical resemblance to, the nexus approach of the Base Erosion and Profit Shifting Action Plan 5. The author identifies technical discrepancies, and confirms the functional depiction by establishing that China’s recognition criteria for qualifying taxpayers, intellectual property assets and revenue, and qualifying expenditure strongly demonstrate a direct link between the qualifying taxpayer, the research and development expenditure and the resulting intellectual property income – the underlying doctrine of the nexus approach.