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China eliminates the profit tax for semiconductor manufacturers in response to US protectionist measures

                                                                                

China's Finance Minister announced on Friday that it will eliminate corporate tax on chip makers to develop this sector and reduce dependence on imported chips amid tensions with the US, according to Mediafax.

The move comes as the United States is considering imposing 50 billion dollars of tax on Chinese exports, invoking discriminatory commercial practices in the high-tech sectors, including the semiconductor sector

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The new rules that the Chinese government wants to implement cover a wide range of semiconductor companies and the tax exemption will be for a period of up to five years. Tax rates after five years will amount to half the 25 percent (as current taxes) by the 10th year, China Finance Ministry Liu Kun said on Friday

The announcement was launched to help industrial and high-tech production and innovation companies backed by the "Made in China 2025" plan (a plan for the Asian nation to increase competitiveness in emerging industries, technology information to aerospace).

At present, China relies heavily on imported semiconductors, which are one of the largest categories of value imports. Chinese officials are trying to overcome foreign rivals and so China will become a leading semiconductor manufacturer by 2030.

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