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Us presses china to reduce barriers for foreign business


Senior U.S. officials pressed China again on Tuesday to reduce barriers for foreign businesses, saying concerns had grown as the regulatory environment became more complex, and they also bought up concerns over a new law on foreign non-governmental groups. Foreign business confidence has been affected by regulatory and protectionist worries, following a series of government investigations targeting foreign companies and China's roll-out of a national security law limiting the use of overseas technology. U.S. business groups have also complained about new Chinese regulations they say favour local firms and make it more difficult to operate in China, as well as other laws related to national security."Concerns about the business climate have grown in recent years, with foreign businesses confronting a more complex regulatory environment and questioning whether they are welcome in China," U.S. Treasury Secretary Jack Lew told Chinese and American businesses and officials."Our two governments have a responsibility to foster conditions that facilitate continued and increased investment, trade, and commercial cooperation," Lew said, on the second day of high-level talks between the two countries in Beijing."This means enacting policies that encourage healthy competition, ensuring predictability and transparency in the policy-making and regulatory process, protecting intellectual property rights, and removing discriminatory investment barriers. These policies are vital as China seeks to build on its economic progress in recent decades."

Secretary of State John Kerry, speaking at the same event, said that as the two economies become more intertwined in shared prosperity, they have more "skin in the game" to keep their economic relationship on an even keel. Kerry expressed concern about China's new law on foreign non-governmental organisations, which he said may have a negative impact on non-profit health care groups that want to do business in China. The law, which was passed by China's parliament in April despite months of criticism and lobbying by the West, brings NGOs under the Ministry of Public Security, giving police broad authority over their finances and work. A U.S. official said the law was a major topic of discussion throughout the two days of talks.

In a press conference marking the end of the talks, Kerry said President Xi Jinping gave assurances that China "intends to remain open" and "does not see that these laws are going to be applied in any way whatsoever that affects the ability to open up and to do business"."We have to sort of show some patience, if you will, to see how in fact it is interpreted," Kerry said. "We could not have registered our concerns more directly or forcefully."China says it is committed to welcoming foreign companies to the country, the world's second-largest economy.

State Councillor Yang Jiechi, China's top diplomat who outranks the foreign minister, said China was working to open its markets, and pointed to talks over a bilateral investment treaty as an example of this. "We are comprehensively deepening reform, expanding, opening up, and our economy is expected to maintain long-term medium-high growth rates."Speaking later, Yang also defended the NGO law."As China carries out reform and opening, the law must be followed. Foreign NGOs' activities in China will not face any obstruction."

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With businesses split on U.S. border tax, wider reform looks shaky


Major U.S. corporations are going to war in Washington over a Republican 'border adjustment' tax proposal meant to boost exports over imports, with lawmakers in Congress coming under pressure from some of the nation's biggest employers. The political split that is opening, most pronounced in the narrowly divided Senate, could doom the proposal. If it dies, prospects for a thorough tax code reform, a top 2017 goal for President Donald Trump's Republicans, would be diminished. Trump, who has vowed to produce a "phenomenal" tax reform package, without recently offering many specifics, has not taken a clear stand on border adjustment. He spoke favorably about it in a Reuters interview on Thursday. The main thrust of border adjustment is to exempt companies from having to pay federal income tax on export revenues, while ending the deductibility of import costs from taxable income. Border adjustment is a core part of a broad tax reform "blueprint" being pushed by House of Representatives Republicans, including House Speaker Paul Ryan and tax panel chairman Kevin Brady. The blueprint has not been put into formal legislation, but border adjustment is already a sticking point. At least eight Republicans in the Senate have expressed concern about it. Several are from Republican-leaning states where Wal-Mart Stores Inc (WMT. N) is a major employer. Wal-Mart is a member of Americans for Affordable Products, a business coalition working against border adjustment. Other members include Best Buy (BBY. N), Costco (COST. O), Gap Inc (GPS. N), Macy's Inc (M. N), Nike Inc (NKE. N) and Target (TGT. N). If the Republican-dominated House approves the blueprint and moves it to the 100-seat Senate, Republicans could lose only a handful of votes and still be able to pass the blueprint.

REPUBLICANS HAVE CONCERNS "If it came up today, I couldn't support it," Arkansas Republican Senator John Boozman told Reuters. "That's not to say I couldn't (support it) in the future with modifications."Boozman said he was concerned that border adjustment would raise prices for consumer goods such as cars and gasoline. He said he worried that Arkansas farmers could be hurt, too, if border adjustment triggered a global trade war. Boozman's state is home to Wal-Mart, the world's largest retailer. Wal-Mart and its employees have been among Boozman's biggest backers in 2011-2016, according to data compiled by the Center for Responsive Politics, a campaign finance watchdog. Wal-Mart Chief Financial Officer Brett Biggs, on a conference call with reporters a week ago, said, "The things that are being discussed about the border adjustment tax pose a concern."

Republican Senator Tom Cotton, Boozman's Arkansas colleague, has also expressed concerns on border adjustment. "He supports the goals of tax reform and job growth. But he believes that a new tax on working-class Americans is not the best way to achieve those goals,” said Cotton spokeswoman Caroline Rabbitt. Perhaps border adjustment's most outspoken Senate critic is Georgia Republican David Perdue. He has called the House proposal "a bad idea" and urged colleagues not to support it. One of Perdue's top backers in 2013-2016, according to data from the center on its website, has been the Club for Growth, a conservative group that donates large sums to like-minded politicians. Club for Growth opposes border adjustment. EXPORTS AND IMPORTS

Border adjustment has attracted opposition not only from retailers, but also from oil refiners and automakers. Texas Republican John Cornyn, a senior senator whose constituents include oil and gas firms, as well as companies that do business with Mexico, told Reuters: "If you’re talking about disrupting business models that people have come to depend on, there’s a lot in play and a lot at stake."Border adjustment has support from U.S. multinational exporters organized in another group, the American Made Coalition. Its members include Boeing Co