This paper discusses the unobserved profit shifting and tax responsiveness of multinational firms in China. Using the CASIF data in 1999~2007 and distinguishing shifting firms from non-shifting firms, this paper estimates firstly the share of shifters and non-shifters and their tax elasticity through the negative binary and finite mixture modeling approach. The results show that about 25% of the affiliates are estimated to be able to shift profits and about 75% not. The tax elasticity of non-shifter is much higher than shifter’s, a 1% increase in the statutory corporate profit tax rate of China is found to reduce the fixed assets of non-shifters in that host country by 2.16% on average, but only by 0.39% for shifters. Moreover, this paper also investigates the heterogeneous effect at firm and industry level.