China should cut taxes and improve business environment as US tax cuts loom: expert

China should reduce taxes for businesses and improve the commercial environment for foreign enterprises doing business in the country in order to relieve the pressure brought by Donald Trump's tax cut plan, according to an expert.

Speaking at a recent seminar held in Beijing, He Ning, former director of the Department of American and Oceanian Affairs at China's Ministry of Commerce and a senior researcher at the Center of China and Globalization, a non-governmental think tank, suggested the Chinese government to lower the industry thresholds especially in the financial sector and reduce the import taxes to attract foreign investors as part of efforts to cope with the negative effects of Trump's tax reduction scheme.

Trump's tax cut plan is widely believed to be part of a policy to bring manufacturing back to the United States.

The former government official refuted the notion that Trump's tax cuts would lead to the return of manufacturing to the United States, saying that the facts show that major multinational companies were not leaving America.

"The tax cuts do not mean that there were no profits in the United States, and whether those enterprises will go back to the United States will be determined by their global production and operation," said He.

He also said that he had talked with executives of some American enterprises, who admitted that it was normal that multinational companies operate globally, so the tax cuts would not cause a return of businesses to the United States.

The expert warned that Trump's tax cut plan would benefit investors investing in the United States, which would help bring back some businesses, but he stressed that it was hard to make a judgment on how big an impact the tax cut plan will have on China's economy.

"The policies of foreign governments normally have some positive effects and negative effects. In a word, China should steady itself first and then make a decision after evaluation," He suggested.

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