China Briefing | Why China should follow Trump’s example and cut taxes
It’s time for the Chinese leadership to heed concerns of private sector, argues Wang Xiangwei
The unorthodox foreign policy views of incoming US president Donald Trump may have unsettled Chinese leaders who are still trying to make sense of the billionaire’s true intentions. But the mainland’s obsession with Trump’s presidency is not just about politics or bilateral trade.
His domestic economic agenda, in which he champions tax cuts and deregulation to boost the economy and create jobs, has inadvertently fuelled an already intense debate in China over the state and direction of the Chinese economy.
More specifically, the issue is about how to help the manufacturing industries. Those industries once gained China a reputation as the world’s workshop and helped turn it into the world’s second largest economy, but are now weighed down by suffocating taxes and fees, soaring land prices and other operating costs.
The latest to enter the fray is Cao Dewang, one of China’s richest tycoons and a leading philanthropist. Over the past 10 days, his interview with a mainland newspaper in which he suggested the investment climate was more favourable in the US than in China has become the talk of the town.
Cao certainly speaks with authority. The founder of Fuyao Glass, the car glass manufacturer which supplies the world’s leading automakers from BMW to GM, has invested nearly US$1 billion in the United States including a US$600 million car glass manufacturer in Ohio.