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China Offers Tax Incentives to Persuade U.S. Companies to Stay

https://www.nytimes.com/2017/12/28/business/tax-bill-china.html

BEIJING — China said on Thursday that it would temporarily exempt foreign companies from paying tax on their earnings, a bid to keep American businesses from taking their profits out of China following Washington’s overhaul of the United States tax code.

There is, however, a catch: To be eligible, foreign companies must invest those earnings in sectors encouraged by China’s government — including railways, mining, technology and agriculture — according to a statement from the Finance Ministry. The measure is retroactive from Jan. 1 this year, the ministry said.

The move would “promote the growth of foreign investment, improve the quality of foreign investment and encourage overseas investors to continuously expand their investment in China,” the ministry said. It did not elaborate.

Despite its appeal as a manufacturing hub, one where companies from around the world have set up operations to tap into a highly skilled work force and strong infrastructure, China charges high taxes. On top of a standard corporate rate of 25 percent, companies are required to make social security contributions and other payments that push their tax burden higher than it is in many other countries.

The newly approved tax incentives in the United States could appeal to companies that are frustrated by China’s rising labor costs, ambitious local competitors and tangled legal systems, or those that would rather spend their money at home or elsewhere. And officials in Beijing have worried that the overhaul could prove to be a challenge to Chinese laws that aim to keep money from leaving the country’s borders.
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But ministers, officials and analysts in much of the rest of the world have said it could create an uneven playing field and set off a race among countries to cut corporate taxes. Because the United States already offers a large and wealthy domestic market, relatively light workplace regulation and large amounts of venture capital, lower tax rates had been one lever that other countries had used in an effort to lure companies.

Asian and European officials have speculated that some of the measures in the revamped tax code could help encourage United States companies produce goods domestically for exporting. European leaders, for their part, have raised the specter of a trade battle and implied they may challenge the overhaul before the World Trade Organization.

China, meanwhile, has had its own concerns.

Many American and European companies have complained in recent years that the country is becoming an increasingly difficult place to do business. Firms say they have had to navigate tricky new laws, been subject to forced technology transfers, and have complained that the authorities curtail their access to Chinese consumers.
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China sets tight rules on how much money flows out of the country, as a way of controlling the value of its currency and keeping its financial system stable. A significant repatriation of foreign earnings could set off a broader capital flight, and weaken the country’s currency, the renminbi. And a sharp fall in the renminbi could spark a vicious cycle with even more companies — and possibly individuals — looking to minimize losses by moving their money out of China.

The currency controls, which were tightened last year as Beijing tried to stem a tide of money leaving the country, have led to complaints from foreign companies doing business there.

It is, for the moment, unclear how much money American companies actually keep in China, or how much they would seek to bring home. Many businesses use complex accounting techniques to book profits overseas, and firms with major investment plans in China could elect to keep their money here regardless.

Regardless, business lobbying groups here said it was unlikely that the Chinese government’s latest measures would be significant enough to keep many American companies from repatriating profits.

Jake Parker, vice president for China operations at the U.S.-China Business Council, said some of his member companies had already said that they would seek to repatriate China earnings to the United States with the tax code change, and were considering doing so quickly to minimize the risk of being subject to capital controls.

“Some are concerned that China may impose foreign exchange controls if these repatriations mount up and lead to capital outflow pressures, like we saw early this year and last year,” Mr. Parker said.
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>>213894
Good thing he walked away from TPP and handed the keys of Pacific Trade to the Chinese
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>>213897
http://prospect.org/article/nafta-cross-border-disaster
After what NAFTA did to Canada, Mexico and the USA why should I be excited for the TPP?
>The average Mexican wage was 23 percent of the U.S. manufacturing wage in 1975. By 2002 it had fallen to less than 12 percent. NAFTA hurt Mexican wages, rather than reducing the differential. In the 20 years after NAFTA went into effect, the buying power of the Mexican minimum wage dropped by 24 percent.
>The World Bank in 2005 found that the extreme rural poverty rate of 35 percent in 1992-94, prior to NAFTA taking effect, jumped to 55 percent in 1996-98, after NAFTA was in place. By 2010, 53 million Mexicans were living in poverty, about 20 percent in extreme poverty, almost all in rural areas.

Wow! We managed to increase rural poverty in Mexico by about 60%! I can't imagine that having any knock on effect on illegal immigration or the influence of cartels! But its OK because we traded stable, generational, middle class manufacturing jobs in Michigan and Ontario to have José work for less than half our minimum wage to do the same work. This eliminated the emerging black middle class in the US BTW.


So let's just sign up for NAFTA 2, Chinese. boogaloo because it worked out so well the first time.
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>>213958
>t. someone too lazy to actually read the TPP
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>>213981
Oh, I did. But you don't need to to see that all the same voices that lied about NAFTA were coming out to champion the TPP. Globalism collapses multiple domestic labour markets into larger international ones creating an economy of scale that reduces the number of workers necessary to maintain an industry while allowing that industry to shop for the lowest wages and least intrusive regulations. It works to circumvent a century of labor laws, environmental regulation and that's bad. We export our environmental problems while creating a trade deficit. Its a lose lose for the working classes of all countries involved and the only class of people that benefit are a coalition of rootless cosmopolitan venture capitalists that gamble on other peoples work. They have no loyalty or roots to any of the places they trammel as they make themselves the gatekeepers of economic success.
Stop calling people stupid for not wanting their governments to sign their names into a suicide pact.
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Wow who could have foreseen this race to the bottom.
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>>213988
NAFTA means all the shit we buy from Mexico is cheap as fuck, and the dollars paid by my employer have significantly more buying power. The TPP would only increase that buying power further.
The only citizens negatively impacted by free trade are unskilled retards. After we cut entitlements and they naturally starve, we can become an even greater nation of consumers.
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Jethro and Cletus are going to be pissed when everything at WalMart goes up in price by 200%
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>>214051
don't matter
they will blame the dems and the fake news media


>https://twitter.com/realDonaldTrump/status/948359545767841792

>I will be announcing THE MOST DISHONEST & CORRUPT MEDIA AWARDS OF THE YEAR on Monday at 5:00 o’clock. Subjects will cover Dishonesty & Bad Reporting in various categories from the Fake News Media. Stay tuned!
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>>214042
Too bad that manufacturing isn't the only industry affected. The tech sector comes to mind with an entire generation of computer science majors getting undercut by Indians with H1-B visas who work for less than minimum wage and send their earnings overseas. Even if you did manage to find an industry that can keeps you in the middle class since you threw away two of the most effective entry industries (manufacturing and tech), that cheaper ford 150 is contributes to a massive trade deficit. This in turn drives the inflation that has seen the net reduction in the real earnability of all salaries. But its OK because you think an 800$ iPhone and 25000$ tonka toy pickup truck are cheap compared to your mortgage on your four bedroom mcmansion. Your dollar doesn't buy you shit compared to what it used to except for toys that have a 50% depreciation as soon as you unwrap them or drive them off a lot.

Way to cheat yourself and everyone you know out of a healthy national economy. This policy creates a scenario the exact opposite of the rising tide floating all boats it was billed to be.
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>not having an even rudimentary understanding of how the development of economies works
>still believing the paradigm of American manufacturing is feasible on any level in 2018

I should mention that I've worked in an American factory. I've never seen so much waste and lost productivity in one place.
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>>214042
We will never cut entitlements. It is political suicide to even mention it. Politicians throw around fluffy words like "reform" and "overhaul," but the outcome is always the same. Money just gets shuffled from one program to another and the budget continues to steadily rise. These programs will be the death of our nations. Not A swift death, mind you. But a slow, painful bleeding out, until some up and coming empire comes along and pities us with a swift final blow.
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>>214051
But now i actually have the money to afford going there in the first place libshit
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>>214205
Yes, you're going to need that $60 extra dollars a month because the 1970s-style stagflation is coming. And then in 3 years when the tax cut expires for individuals but not for corporations, you will go back to what you were paying under Obama.
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>>214042

Fun fact: In an average month, 41.6% of blacks, 36.4% of hispanics, 17.8% of asians/pacific islanders, and 13.2% of whites receive some form of government assistance.

https://www.census.gov/newsroom/press-releases/2015/cb15-97.html

Demographics of Alabama;

3,207,584 white (65.8%)
1,306,432 black (26.8%)

Doing a little math we find that;

3,207,584 x .132 = 423,401
1,306,432 x .416 = 543,476

So, despite whites outnumbering blacks nearly 3:1, most "entitlements" go to blacks.

>Mississippi
>56.9% white
>37.7% black

>Georgia
>53.4% white
>32.0% black

Should I continue?
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>>214223
Educate ourselves to do what, Cletus? Your entitlement hateboner has nothing to do with Trump selling out the country to multinatinonal corporations while telling gullible faggots like yourself some nationalist wetdream about coal jobs and border walls that isn't even possible in the 21st century
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>>214227
Korea proves border walls are possible
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>>213897
>Good thing he walked away from TPP and handed the keys of Pacific Trade to the Chinese
Stay ignorant idiot. Thats not what the TPP was.
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>>214058
>they will blame the dems and the fake news media
They should because that's whose to blame.
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>>214051
aww libshit is mad again. Go away the adults are talking.
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>>214070
this is pretty much spot on.

one of the few things trump got right was rejecting this type of deal.

it's too bad the rest of his economic and social policies are at best retarded pipe dreams that pander to hillbillies.
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>>214316
The North-South Korean border wall is irrelevant. It's manned by over 23,000 American troops, with the US Seventh fleet for support. The 4 mile buffer zone is so heavily mined you literally cannot walk from one side to the other. Neither side knows where all the mines are.

The Koreas are under a cease fire, but are still technically at war.

Walls do shit without firepower to back them up.
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>>214386
that's why you have ICE and the police patrolling the wall retard

you think they are going to build the wall and then just disband the literal army of border agents and shit we already have?

protip: the wall can have thousands of sensors and shit on it you doofus, so you can catch anyone who attempts to circumvent it unlike now where they can just run right fucking across
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>>214360

>pander to hillbillies

As well as business owners, Wall Street, and most of middle America.

But yeah, keep making jokes about poor rural people while you simultaneously claim to want to "help the poor."

TMZ-tier democrats are the fucking worst...
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>>214386
So...what you are saying is that walls are effective so long as you are willing to put some effort into defending and maintaining them?
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>try to get businesses to come back to your country with ridiculous tax cuts that enrage half of the voter base
>china just gives those same businesses better tax cuts to keep them in china
lmao
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>>214042
>NAFTA means all the shit we buy from Mexico is cheap as fuck, and the dollars paid by my employer have significantly more buying power.

Absolute nonsense, the cost of the products imported from Mexico are the same or higher then those made in the U.S. and with the loss of good jobs in the U.S. comes loss to the tax base, thus our ever crumbling infrastructure, which only costs you even more.

"Free Trade" ONLY benefits the 1%er parasitical Wall Street investor class, everybody else gets fucked.
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>>214329
>tell Jethro his prices are going up
>Jethro says "hurrdurr the libshits are mad again!"
Haha i guess it's just fake news, right? Boy are you going to be surprised.
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>>214222
You realize applying national statistics to 1/50th of the country is statistically worthless right? Why don't you dig up Alabamas welfare specifically and do the math on that?
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>>214459

Do you have any evidence to suggest the government assistance usage rate is higher than average among whites and lower than average among blacks in Alabama? Because it seems, at least to me, you're throwing away valid data because it offends your colored sensibilities (or are you a filthy fucking race traitor?)
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I wonder what was going through Trump's brain when he rejected joining TPP...

Instead of having an American led Pacific trading bloc, those countries are going to be persuaded to join a Chinese led Pacific trading bloc.

Sure there's a whole bunch of negatives in TPP, but totally rejecting TPP is worse than joining it.
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>>213894
The irony in this is that an illegal typically operates within the law and contributes to the economy. The people these bastards cater to leaves the country behind at every opportunity while giving money to their enemies. But, hey, at least trickle down economics work! Derp.
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>>214552
>illegals contribute more
Prove it.
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The obamaish leftist trade deals were and still are a detriment to this great nation. American made products are and always will be the best quality and most reliable products!
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>>214179
>We will never cut entitlements

You did. Multiple presidents both Repub and Demo did so.
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>>214496
Yugo should use Alabaman stats (they have a site for this shit guaranteed). Not taking nations stats and applying them at a state level which makes no trucking sense.

your number are pure guesstimates because the white welfare rate for Mississippi for example is radically different then say New England.
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>>214593
Which is why they make up over 60% of the federal budget? As I said, they just shuffle money from one program to another in order to keep spending to justify future spending.
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>>214640
Misleading. Social security is in a separate account from the federal budget and pays for itself until they raid it for other things. Meanwhile, military spending hasn't been discretionary since 2010.
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>>214589
>American made products are and always will be the best quality and most reliable products!

Lol. Nope.




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