‘China Fears The Tax Changes Could Make The U.S. A More Attractive Place To Do Business’

‘Beijing Fears The Tax Changes Could Make The U.S. A More Attractive Place To Do Business’

“Beijing fears the tax changes could make the U.S. a more attractive place to do business and, combined with expected higher U.S. interest rates, sap investment from China.” (“U.S. Tax Plan Draws Attacks Abroad…” The Wall Street Journal, 12/11/2017)

“…economic mandarins in Beijing are focusing on a potentially more immediate threat from Washington— Donald Trump’s tax overhaul. … While the tax overhaul isn’t directly aimed at Beijing, it is another way China will be squeezed.” (“Beijing Develops Plan To Counter Trump Tax Overhaul,” Wall Street Journal, 12/11/2017)

• “An official involved in Beijing’s deliberations called Washington’s tax plan a ‘gray rhino,’ an obvious danger in China’s economy that shouldn’t be ignored. … The sense of urgency illustrates Beijing’s challenge in battling policies rolled out under Mr. Trump’s ‘America First’ banner.” (“Beijing Develops Plan To Counter Trump Tax Overhaul,” Wall Street Journal, 12/11/2017)

• “In the Beijing leadership compound of Zhongnanhai, officials are putting in place a contingency plan to combat consequences for China of U.S. tax changes… according to people with knowledge of the matter. What they fear is a double whammy sapping money out of China by making the U.S. a more attractive place to invest.” (“Beijing Develops Plan To Counter Trump Tax Overhaul,” Wall Street Journal, 12/11/2017)

“The sweeping overhaul of the U.S. tax code, estimated to result in $1.4 trillion in U.S. cuts over a decade, is also serving as a wake-up call for Beijing, which for years has dragged its feet on revamping China’s own rigid tax system. Chinese businesses have long complained about high taxes, and the government has pledged to reduce the levies on them.” (“Beijing Develops Plan To Counter Trump Tax Overhaul,” Wall Street Journal, 12/11/2017)

“Under the tax plan now going through the U.S. legislative process, America’s corporate levy could drop to about 20% from 35%. Over the next few years, economists say, that could spur manufacturers—whether American or Chinese—to opt to set up plants in the U.S. rather than China, where total tax burdens on companies are among the highest of major economies.” (“Beijing Develops Plan To Counter Trump Tax Overhaul,” Wall Street Journal, 12/11/2017)

• “In the near term, expectations for such moves could cause money managers and others to move money out of emerging markets like China and instead park the funds in the U.S.” (“Beijing Develops Plan To Counter Trump Tax Overhaul,” Wall Street Journal, 12/11/2017)