The thing about Chinese businesses not paying taxes has been doing the rounds for years. As far as I am aware, it is an urban myth. The Hacienda has frequently gone on record in denying that there is such an arrangement. What does exist is a similar arrangement for European citizens, namely a double taxation system, one that was introduced between China and Spain in the early 1990s. The Chinese government offers, or has offered in the past, special incentives to its citizens to establish businesses overseas. Make of that what you will.