In March 2007, China approved what is being called the most important changes to the tax regime. The new Enterprise Income Tax Law provides a unified tax treatment for foreign-invested and domestic enterprises. The authors analyse the major changes introduced by the new law, including elimination of tax incentives for foreign investment enterprises, new tax incentives, withholding tax, general anti-avoidance provision, late payment interest on transfer pricing adjustments, thin capitalization, and taxation of non-resident enterprises. They also look at effective use of tax treaties, including popular jurisdictions for setting up holding companies, tax-free structuring, and disposal and exit strategies. Finally they consider tax minimization strategies, including use of contract manufacturing structures, use of sales/procurement agent structures with limited functions and risks, and potential risks.