Forbes has released the 2007 Tax Burden & Reform Index, which shows that China continues to have the heaviest tax burden among Asian economies due to the nation's extraordinary social security and pension rates.

According to the index, generally speaking, continental Europe and China have the heaviest tax burden, while the rest of Asia outside of China, the Middle East, Russia and the United States have the lightest.

The five economies with the highest tax burden index are France, followed by Belgium, China, Sweden and Italy. The five economies with the lightest tax burden are the United Arab Emirates, followed by Qatar, Hong Kong, Cyprus and Singapore.

In addition, most Asian economies continue to enjoy a more stable and tax-friendly environment than other parts of the world.

In regards to China, the country has the heaviest tax burden among Asian countires. However, China's performance this year has improved significantly due to its movement toward tax reform. So far, its tax burden indicator has dropped by eight points. This was the result of the announced tax reform to bring corporate tax rates down to 25% and to apply these rates to all domestic and foreign companies.

China was second on the list last year and all indications show that its position will again drop next year.

The Forbes Tax Misery & Reform Index is calculated based on corporate tax rates, personal income tax rates, tax rates of the rich, sales/value-added tax rates as well as the social security contributions of employers and employees. A higher index indicates a higher degree of tax burden.