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Designing Foreign Tax Credit Rules In China: The Case Of Foreign Loss Limitations, Wei Cui

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Over the last few years, China’s large trade surplus against other countries, as well as its high domestic savings rate even relative to its high investment rate, have resulted in a very substantial foreign currency reserve that puts the country in the position of a significant capital exporter. The huge amount of foreign currency assets held by the Chinese government— near $1.9 trillion at the end of 2008 — and a breathtaking series of acquisitions made by Chinese firms overseas are now salient items in international business reporting and public discussion. China’s new posture as an exporter of capital has …