The latest version adds new clauses that prohibit illegal possession, looting, private partition or withholding of State assets. Similar clauses were also added for collective and private property.

Committee member Zhu Xiangyuan said worries that the law might facilitate fraudulent acquisitions and mergers of State assets are unfounded. He said China is drafting laws on corporations and the protection of State property to regulate mergers and acquisitions.

The draft also says farmers can extend their land contracts when they expire; abolishes the previous ban on city residents buying rural house sites and leaves the issue to be dealt with by other laws and regulations such as the Land Management Law.

The committee yesterday also discussed submitting the draft corporate income tax law to the NPC's next full session; and will vote on it on Friday.

The law aims to unify corporate income tax rates for domestic and foreign companies at 25 per cent to guarantee a "level playing field".

Legislators considered the tax rate appropriate and said the revision should not be delayed as favourable tax policies for overseas companies discriminate against local enterprises.

Some favourable policies in the draft, such as those for high-tech companies, investment for environmental protection and scientific research, and charity donations, would optimize the investment structure in China and help build a harmonious society, members said.

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