(Yicai Global) Nov. 16 -- China will keep an eye on the most comprehensive US tax reform program since the Reagan administration, aimed at making US enterprises more competitive and encourage overseas capital to flow back to the US, said China's vice minister of finance, Zhu Guangyao.
Zhu, quoted by the National Business Daily, was speaking at the 26th Sino Foreign Management Seminar yesterday. "It is not only because the reform has great impact on the US, but the global economy as well," he said.
The US is now preparing for the biggest tax reform program since the Reagan Administration at full stretch, Zhu said, which will reduce corporate income tax rate from 35 percent to 20 percent, lower the personal income tax substantially, double the personal tax deduction which is currently USD6,350 and double the tax deduction based on the average level for couples and families.
The US introduced an interest rate normalizing process in 2015 and has raised the interest rate twice this year. The third rise is expected this December. The interest rate is likely to be raised for three or four times next year, observers expect. The Federal Reserve (FED) also aims to shrink balance sheet. As it affects capital flows, the Fed policies have considerable impact on the flow of global capital, Zhu said.