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China cuts taxes on circuit industry in face of US pressure

Posted on Wednesday, May 22nd, 2019 By The Associated Press

BEIJING (AP) — China is cutting taxes on its fledgling software and integrated circuit industries to spur development in the face of U.S. export controls that threaten to handicap Chinese tech companies.

The Finance Ministry's announcement Wednesday comes amid tension over Washington's decision to restrict technology exports to Chinese telecom equipment giant Huawei and other companies.

Chinese makers of smartphones and other products rely on U.S. components but Beijing is spending heavily to develop its own suppliers.

The Finance Ministry said software and integrated circuit companies founded before the end of 2018 will owe no income tax for their first two years and the rate will be cut by half in the third through fifth years.

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