China cuts taxes to spur chip makers in face of US pressure

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China is cutting taxes on its fledgling software and integrated circuit industries as US export controls threaten to handicap Chinese tech companies.

The United States, Europe, Japan and other trading partners say those plans violate China’s market-opening obligations. Chinese officials have offered to alter details but are unlikely to abandon a strategy they consider a path to prosperity and global influence.

Beijing has spent billions of dollars over the past two decades on research subsidies and importing technology, sometimes using tactics that have angered Washington and other governments. Washington imposed a seven-year ban on technology sales to ZTE over its exports to Iran and North Korea. Trump agreed to restore access after ZTE agreed to pay a $1 billion fine and replace its executive team.Also last year, the Trump administration imposed restrictions on technology exports to a state-supported Chinese semiconductor maker, Fujian Jinhua Integrated Circuit Co. The Commerce Department said Jinhua was developing the ability, possibly with U.S.

 

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