China will extend preferential income tax policies for foreign nationals working in the country through the end of 2027, in a move to encourage foreign businesses in China.

China’s Ministry of Finance and the State Taxation Administration announced on Monday that the country would extend the policy that enables expatriates to benefit from taxable deductions on house rental, children’s education, language training, and other costs.

The European Union Chamber of Commerce in China responded that the four-year extension of favorable individual income tax policies is "very positive news".

The move would help curb brain drain of foreign talents, the chamber said..

"Announced on the margins of the start of the new school year, it will be extremely welcome news for families that have made the decision either to come to or remain in China," it said in a statement.