Ease heavy tax bur­den to up­grade man­u­fac­tur­ing

China Daily (Hong Kong) - - COMMENT - MORE THAN 20 DE­PART­MENTS of

the State Coun­cil, China’s cabi­net, are press­ing ahead with the gov­ern­ment’s “1+X” ini­tia­tive. The “1” stands for “Made in China 2025”, a road map to en­hance the coun­try’s man­u­fac­tur­ing power, and “X” means guide­lines for sec­tors in­clud­ing smart man­u­fac­tur­ing and in­no­va­tion of high-end equip­ment. But for the ini­tia­tive to work ex­tra ef­forts have to be made to lower tax bur­den on en­ter­prises, Bei­jing Youth Daily com­mented on Thurs­day:

First pro­posed by Premier Li Ke­qiang in his gov­ern­ment work re­port in 2015, the “Made in China 2025” guide­line was a re­sult of for­ward-think­ing and proac­tive read­ing of the chang­ing tides of glob­al­iza­tion. Since the 1990s the United States has wit­nessed an ex­o­dus of do­mes­tic man­u­fac­tur­ers to emerg­ing mar­kets, but it was hit hard by the fi­nan­cial cri­sis in 2008 and 2009 partly due to its weak­ened man­u­fac­tur­ing.

That, to some ex­tent, ex­plains why Don­ald Trump, the new US pres­i­dent, won un­par­al­leled sup­port from the work­ing class dur­ing last year’s pres­i­den­tial elec­tion. A sta­ple of his cam­paign ef­forts was con­vinc­ing blue-col­lar work­ers that he would raise their pay and cre­ate more jobs by bring­ing US man­u­fac­tur­ers back from over­seas mar­kets.

China can learn a lesson or two from the US’ mis­judg-

ment and Trump’s short­sight­ed­ness. The US pres­i­dent did of­fer to re­duce the tax bur­den and lessen the su­per­vi­sion on en­ter­prises at home, but sim­ply fo­cus­ing on bet­ter em­ploy­ment in­stead of tech­no­log­i­cal in­no­va­tion will prob­a­bly get the coun­try’s man­u­fac­tur­ing nowhere.

Up­grad­ing its man­u­fac­tur­ing in­dus­try is ex­actly what China ex­pects from the “1+X” ini­tia­tive, which at­taches great im­por­tance to ar­eas such as smart and green man­u­fac­tur­ing, in­no­va­tion of high-end equip­ment, and new ma­te­rial. The in­dus­trial in­no­va­tion driven by the In­ter­net Plus, mass en­trepreneur­ship and in­no­va­tion, and “Made in China 2025”, as Li fore­saw, has the po­ten­tial to usher in a “new in­dus­trial rev­o­lu­tion”. That high­lights the need to ease the heavy tax bur­den on Chi­nese man­u­fac­tur­ers, which has ham­pered the in­dus­trial trans­for­ma­tion.

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