China Embassy
Cao Dewang, chairman of Fuyao Glass Industry Group Co Ltd

China Auto Glass Company Moves Jobs to US Due to High Taxes at Home

Dec. 22, 2016
Fuyao Glass Industry Group, which supplies GM and VW, said China was home to the "world's highest taxes" and that the manufacturing industry suffered under taxes 35% higher than those imposed by the US.

A Chinese auto glass tycoon has caused a stir by shifting part of his empire to the United States and setting up a factory in Ohio, citing high taxes and soaring labor costs at home.

Cao Dewang's $600-million investment comes after Donald Trump threatened to declare Beijing a currency manipulator and slap 45% punitive tariffs on Chinese imports to protect American jobs.

The 70-year-old tycoon's decision to open a glass factory in Ohio in October -- a rare case of jobs being exported from China to the U.S. -- triggered an outpouring of criticism on social media.

The phrase "Cao Dewang has escaped" became a hot topic, generating nearly 10 million views on the Twitter-like Weibo microblog and many comments urging China to "not let Cao Dewang run away."

Cao's Fuyao Glass Industry Group -- a supplier to big names including Volkswagen and General Motors -- claims to be the biggest exporter of auto glass in the world, reporting 2.6 billion yuan (US$370 million) profits last year.

Cao defended himself in an interview with the Beijing News on December 21, saying he "did not run and will not run. The center of my business is in China because I'm Chinese."

"I'm a business man and I'm doing business in the U.S." he said. "I'm merely reminding the government that taxes and labor costs are too high."

In an interview with the state-owned China Business News last week, Cao said the country was home to the "world's highest taxes" and that the manufacturing industry suffered under taxes 35% higher than those imposed by the U.S.

Cao is a high-school dropout who began building his fortune as a salesman for a local glassmaker.

The Fuyao group owns production lines in nearly a dozen Chinese cities including the capital Beijing and the commercial hub Shanghai. It also has a factory in Russia.

Defending Cao's remarks, the Communist Party paper the People’s Daily said on December 22 that the fact that "entrepreneurs dare to raise problems means (they) still hold confidence in China’s economy."

Cao’s comments reflect "strong personal feelings" but they touch on "some of the deep conflicts and problems in China’s economy," it said.

Copyright Agence France-Presse, 2016

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