With the trade war between China and the United States continuing to heat up, some Chinese cities are taking it upon themselves to help China come out on top. Shenzhen, where Huawei is based, has stated that it will be lowering salary tax to 15% from the current value of 45% in an effort to expedite innovation.
Wang Lixin, a deputy, stated that the city would be making use of its own operating income for covering the drop in tax revenue. Under the announced scheme, the qualifying individuals shall be able to avail a lower personal income tax. Wang said during an innovation summit held in Shenzhen, ‘Suppose you earn a million yuan [US$144,894] a year. Under the new rules, you will need to pay 150,000 yuan as income tax, which saves you about 300,000 yuan at the current level. We need to fill all the links in the supply chain. Then we are truly competitive in the world, and can truly have the power of say.’
The plan that has been put forth by Shenzhen has already gained approval from Beijing. It is being extended to local as well as international talent while hoping that this would lead to the city becoming a tech-innovation hub. Shenzhen aims to pull talent from individuals and growing and developed businesses that are working in the field of telecommunications and electronics as would be expected because these two sects took the brunt of the hit thanks to the export bans imposed by President Trump.
The US Government has singled out Huawei and DJI as part of the trade negotiations that are going on. Trump administration has been making the life of Chinese companies difficult by making it difficult for them to get their hands on components that are being manufactured in the US. However, China remains unhinged. When Google withdrew its Android support from Huawei, many thought it would cripple the Chinese telecom giant. But the Shenzhen based company soon revealed that it has its own operating system ready for launch.
What do you think of this whole fiasco? Do let us know!
