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TEHRAN, May 22 - China is cutting taxes on its fledgling software and integrated circuit industries as U.S. export controls threaten to handicap Chinese tech companies.
TEHRAN, Young Journalists Club (YJC) - The Finance Ministry's announcement Wednesday comes amid a spiraling tariff war with Washington over Chinese technology ambitions.
Most smartphones, tablet computers and other electronics are assembled in China. But its manufacturers usually use U.S., Japanese or Taiwanese microchips and other components. Beijing is developing its own suppliers to capture more of the industry's profits and reduce what the ruling Communist Party sees as a security risk in relying on foreign vendors.
Integrated circuits, or microchips, are among technologies China has targeted for state-led development in official plans that helped to ignite Beijing's tariff battle with President Donald Trump.
The United States, Europe, Japan and other trading partners say those plans violate China's market-opening obligations. Chinese officials have offered to alter details but are unlikely to abandon a strategy they consider a path to prosperity and global influence.
Under the new measure, software and integrated circuit companies founded by the end of 2018 will owe no income tax for two years and the rate will be cut by half for three years after that, the Finance Ministry said.
Its two-sentence statement gave no details. But the top economic official, Premier Li Keqiang, said May 8 policies to promote the industry would apply equally to foreign-financed and Chinese companies.
Beijing has spent billions of dollars over the past two decades on research subsidies and importing technology, sometimes using tactics that have angered Washington and other governments.
Trump vetoed the 2017 acquisition of an Oregon tech company, Lattice Semiconductor, after it became clear the buyer was financed by the Chinese government.
Source: AP
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