China is offering a tax break to foreign companies to try and persuade them to remain in the country after the GOP tax plan created new incentives to bring more businesses to the U.S.
The New York Times reported that China will temporarily allow the foreign companies to not pay tax on their earnings.
The exemption will “promote the growth of foreign investment, improve the quality of foreign investment and encourage overseas investors to continuously expand their investment in China,” China’s Finance Ministry said in a statement Thursday.
However, those companies must invest those earnings from the exemption in areas being promoted by the Chinese government, like technology and mining. The exemption is retroactive from Jan. 1, 2017.
The announcement comes just days after President TrumpDonald John TrumpHouse Democrat slams Donald Trump Jr. for ‘serious case of amnesia’ after testimony Skier Lindsey Vonn: I don’t want to represent Trump at Olympics Poll: 4 in 10 Republicans think senior Trump advisers had improper dealings with Russia MORE signed the new GOP tax plan into law, which includes measures like a lower corporate tax rate to attract manufacturers to the U.S.
The move also arrives amide companies’ worries about China’s high tax rates and limits for businesses there. American and European companies say that complex laws and a limited access to Chinese consumers make it more difficult to do business there, according to The Times.
Trump has often highlighted China as a country the U.S. needs to be more competitive with on trade.
“I don’t blame China,” he said of the country’s use of trade practices during a November trip there. “After all, who can blame a country for being able to take advantage of another country for benefit if their citizens? I give China great credit.”