| Summary: | For ordinary enterprises, transfer pricing is for internal transactions and therefore an internal management issue. The practicing of transfer pricing is mainly based on cost and market price considerations. The selection of transfer pricing policy is determined by some elements related to the motive, process, and result of the management behavior. The internal cooperation relationship is being broken up in China during the transition towards a matured market economy, and changes in external environments have also altered practices of transfer pricing in many firms.
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