China’s high-tech industries are among sectors poised to gain from a fresh round of tax cuts, just as US President Donald Trump weighs tariffs to penalize them.
The value-added tax on manufacturing would be cut from 17 percent to 16 percent starting on May 1, while the rate on transportation, construction and telecommunications services would be lowered from 11 percent to 10 percent, the Chinese State Council said in a statement late on Wednesday.
The reductions would directly benefit high-end manufacturing and innovation-driven technology companies that are supported by the state’s “Made in China 2025” plan, a report by Sinolink Securities Co (國金證券) said.
Profits would also be boosted in sectors including construction, mining, public utilities, information technology and machinery, it said.
The industrial policy envisions catapulting 10 strategic industries to global competitiveness by 2025.
“Lost competitiveness because of an aging population and rising land and energy costs has pushed China’s manufacturing sector into a bottleneck,” Sinolink said. “The nation is focusing on manufacturing, especially advanced manufacturing, and using tax and fee cuts to reduce costs for them.”
The details announced on Wednesday are the first part of a total of 800 billion yuan (US$127.176 billion) in tax cuts this year for individuals and enterprises announced by Chinese Premier Li Keqiang (李克強) earlier this month.
Those combined with reductions in business fees add up to savings of 1.1 trillion yuan, the government said.
The 2025 plan supports information technology, high-end machinery and robotics, aerospace, marine equipment and ships, advanced rail transport, renewable-energy vehicles, electric power, agricultural machinery, new materials and the biomedical industry.
The list of products that the US hits with tariffs would line up with industries included in the “Made in China 2025” strategy, White House National Trade Council Director Peter Navarro said on Wednesday in an interview.
Meanwhile, US Ambassador to China Terry Branstad warned China against retaliatory measures against imports of US soybeans, as the world’s two largest economies edged closer to a trade war.
Any effort to curb US soybean imports would harm regular Chinese citizens more than US growers, the former Iowa governor told reporters at the US embassy yesterday, adding that the crop provides a key source of protein — in tofu and as feed for hogs — for the country’s growing middle class.
“It doesn’t make sense and it would hurt Chinese consumers,” Branstad said when asked about possible retaliation on soybeans. “Ultimately, the Chinese will realize that we need to work together on these issues and retaliation is not the answer, but instead collaboration and cooperation to address the issues that have been around for a long time.”
China would not submit to unilaterally coerced negotiations and could not rule out any options to defend its interests, Chinese Ministry of Commerce spokesman Gao Feng (高峰) said earlier yesterday.
US tariffs set a bad precedent and cast a shadow on the global economy, he said at a briefing in Beijing, adding that China hopes the US will solve disputes via dialogue.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
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