In the Wall Street Journal, Li Yuan tells readers of the lengths the Chinese city of Wuhan took to attract Xiaomi, a tech hardware manufacturer. Wuhan offered tax breaks, rebates, financing, R&D funding and more to Xiaomi to win its new facilities. Cities looking to attract Amazon’s new headquarters will surely be forced to roll out such lavish incentives. The new facility will offer 50,000 jobs to the community that ultimately hosts it. Yuan writes that those incentives may also bring leaders under fire for criticism:
Wuhan’s zeal illustrates the resources and political will that authoritarian governments can muster to meet an objective—in this case moving up the value chain.
American cities offer incentives too. Amazon can expect to receive breaks on property, state and local taxes, as well as tax rebates and other possible sweeteners such as grants for training employees and expedited permit approvals. To get electronics makerFoxconn Technology Group to locate a $10 billion plant in Wisconsin, the state promised $3 billion in tax credits, spread out over 15 years.
While Wisconsin has to defend the deal against criticism and concerns about taxpayer giveaways, the Wuhan government faces no meaningful opposition.
Read more here.