Beijing develops plan to counter Trump tax overhaul

Chinese officials' contingency plan includes higher interest rates and tighter capital controls

As the U.S. prepares to take China to task over trade imbalances, economic mandarins in Beijing are focusing on a potentially more immediate threat from Washington— Donald Trump’s tax overhaul.

In the Beijing leadership compound of Zhongnanhai, officials are putting in place a contingency plan to combat consequences for China of U.S. tax changes as well as expected interest-rate increases by the Federal Reserve, according to people with knowledge of the matter. What they fear is a double whammy sapping money out of China by making the U.S. a more attractive place to invest.

Under the plan, the people say, the People’s