Thursday, April 02, 2009

A unilateralist China, tax havens' friend?

We have long noted with concern China's willingness to protect tax havens close to it, notably Hong Kong and Macau, and possibly Singapore. Not long ago, European Commission President José Manuel Durão Barroso said that countries like China, for example, "don’t have the culture of a common setting of rules.

Now this, from the FT, suggests that a China position on tax havens may be coming more into the open now.

"In tense pre-summit manoeuvring, France and Germany threatened to block a deal today if their ”red lines” on tougher financial regulation were not met, raising the prospect of a clash with China over tax havens. . . . Mr Sarkozy said he feared China was an obstacle to a clampdown on tax havens and that he suspected that ”the interests of Hong Kong and Macao” lay behind it."

Mr Brown sat the French president next to Hu Jintao, the Chinese president, at last night’s official G20 banquet in an attempt to forge a compromise over dinner. We aren't holding our breaths. But let's see what emerges. Watch the G20 event unfold here.

And see more details about China here.


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