Is a Mexico-China Competition Emerging in US Supply Chains? A Comparative Perspective
Table 4.
Governmentassistance for Chinese firms expanding overseas investments
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| Assistances |
Policies |
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| Bank support |
Low-interest rate loans. Shanxi provincial authority collaborated with five banks to set up special loans of 40 billion yuan to finance firms going abroad below the loan prime rate. http://sx.people.com.cn/n2/2022/0515/c189130-35268884.html.Overseas investment insurance. Sinosure, an export credit insurance SOE, offers investment insurance that assumes the loss of shareholders’ equity in overseas investments. https://www.sinosure.com.cn/ywjs/xmxcp/hwtzbx/hwtzbxjj/index.shtml. |
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| Tax breaks and incentives |
Bilateral tax treaty. China maintains an extensive double taxation treaty in addition to unilateral tax reliefs, including 112 countries and regions. https://www.gov.cn/yaowen/liebiao/202307/content_6895583.htmTax credits are granted to Chinese resident firms when they incur foreign tax on income. https://shanghai.chinatax.gov.cn/zcfw/rdwd/202201/t461888.html. |
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| Cutting red tape |
“Regulations on the Administration of Overseas Investments by Enterprises.” By passing the policy in 2018, the central government removed pre-approval processes for Chinese firms investing abroad. https://www.ndrc.gov.cn/fggz/lywzjw/zcfg/201712/t20171226_1047050.html"Data Security Law." By passing the law in 2021, authorities facilitate data exchange and information sharing between investment entities, banks, embassies and consulates abroad, and taxation and finance departments. https://www.gov.cn/xinwen/2021-06/11/content_5616919.htm. |
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Source: Authors’ collection based on open source.
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