Former Morgan Stanley CEO John Mack said he's hopeful President Trump's meeting with Chinese President Xi Jinping will bring favorable conditions for US companies working in China. “I think clearly the Chinese want [an] open-door policy on trade with the US,” Mack told the FOX Business Network’s Maria Bartiromo.
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US companies interested in expanding into China have faced challenges, with the Chinese government restricting foreign companies to joint ventures, and the continuing possibility of high tariffs on the US side. “I think we have to be very flexible on trade," Mack said. "I do not think we can throw high tariffs on their products coming into the country and I think that would hurt all of us.”
The key, Mack argues, is a fair chance for US companies in China. "What we want is to have a level playing field in that country and I think over time that’s happening.”
Mack said greater regulatory controls that made sense after the financial crisis, are hurting growth in the financial sector now.
“I had a CEO, one of the major banks, say to me, he said, ‘John, I’m sitting on so much cash, they will not let me raise the dividend, they will not let me buy stock back in, if this continues we’re going to be a utility stock and not a growth stock.’”
But Mack was optimistic about a potential rollback of financial regulations by the Trump administration.
“So, I think initially, I think it was the right thing to do, I think we need to ease up and my impression is, and you were just in Washington, President Trump is going to ease up and I think that’s healthy.”
When Bartiromo asked about the push for tax reform, Mack said he was more concerned about how the tax revenue was being spent. “To me it’s not about the rate, it’s about how money is being used when you pay your taxes.”
Mack supports improving America’s infrastructure, but also called for a reduction in spending to go along with any tax cuts.
“I’m not that focused on ‘do we need to reduce taxes?’ If we can do that and cut spending to areas where we’ve not been efficient in how we spend money, that’s fine, but we need to fix our infrastructure across the United States.”