updated 3/15/2007 11:33:34 PM ET 2007-03-16T03:33:34

China's legislature approved a law Friday to end three decades of blanket tax breaks for foreign investors, raising their tax rates to match those of Chinese companies.

The law would set tax rates for most companies at 25 percent of their profits. Until now, Chinese companies have paid 33 percent, while foreign investors received tax breaks that kept their rates as low as 10 percent.

The new measure was approved by the National People's Congress on the final day of its annual session. The vote was 2,826 in favor, with 37 opposed and 22 abstentions.

China's tax breaks helped to attract nearly US$700 billion (euro529.26 billion) in investment that fueled the country's rise to become the world's fourth-largest economy. But Chinese companies complain that they were treated unequally in comparison to foreign competitors.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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