Also decode entities when emitting attributes. Also, lexer should not process string escapes in jsx attributes.

src/compiler/emitter.ts

@@ -2030,7 +2030,7 @@ const _super = (function (geti, seti) {
                 emitTrailingCommentsOfPosition(commentRange.pos);
             }
 
-            emitExpression(node.initializer);
+            emitExpression(initializer);
         }
 
         function emitShorthandPropertyAssignment(node: ShorthandPropertyAssignment) {

src/compiler/parser.ts

@@ -905,6 +905,10 @@ namespace ts {
             return currentToken = scanner.scanJsxToken();
         }
 
+        function scanJsxAttributeValue(): SyntaxKind {
+            return currentToken = scanner.scanJsxAttributeValue();
+        }
+
         function speculationHelper<T>(callback: () => T, isLookAhead: boolean): T {
             // Keep track of the state we'll need to rollback to if lookahead fails (or if the
             // caller asked us to always reset our state).
@@ -3831,8 +3835,8 @@ namespace ts {
             scanJsxIdentifier();
             const node = <JsxAttribute>createNode(SyntaxKind.JsxAttribute);
             node.name = parseIdentifierName();
-            if (parseOptional(SyntaxKind.EqualsToken)) {
-                switch (token()) {
+            if (token() === SyntaxKind.EqualsToken) {
+                switch (scanJsxAttributeValue()) {
                     case SyntaxKind.StringLiteral:
                         node.initializer = parseLiteralNode();
                         break;

src/compiler/scanner.ts

@@ -27,6 +27,7 @@ namespace ts {
         reScanSlashToken(): SyntaxKind;
         reScanTemplateToken(): SyntaxKind;
         scanJsxIdentifier(): SyntaxKind;
+        scanJsxAttributeValue(): SyntaxKind;
         reScanJsxToken(): SyntaxKind;
         scanJsxToken(): SyntaxKind;
         scanJSDocToken(): SyntaxKind;
@@ -817,6 +818,7 @@ namespace ts {
             reScanSlashToken,
             reScanTemplateToken,
             scanJsxIdentifier,
+            scanJsxAttributeValue,
             reScanJsxToken,
             scanJsxToken,
             scanJSDocToken,
@@ -911,7 +913,7 @@ namespace ts {
             return value;
         }
 
-        function scanString(): string {
+        function scanString(allowEscapes = true): string {
             const quote = text.charCodeAt(pos);
             pos++;
             let result = "";
@@ -929,7 +931,7 @@ namespace ts {
                     pos++;
                     break;
                 }
-                if (ch === CharacterCodes.backslash) {
+                if (ch === CharacterCodes.backslash && allowEscapes) {
                     result += text.substring(start, pos);
                     result += scanEscapeSequence();
                     start = pos;
@@ -1737,6 +1739,20 @@ namespace ts {
             return token;
         }
 
+        function scanJsxAttributeValue(): SyntaxKind {
+            startPos = pos;
+
+            switch (text.charCodeAt(pos)) {
+                case CharacterCodes.doubleQuote:
+                case CharacterCodes.singleQuote:
+                    tokenValue = scanString(/*allowEscapes*/ false);
+                    return token = SyntaxKind.StringLiteral;
+                default:
+                    // If this scans anything other than `{`, it's a parse error.
+                    return scan();
+            }
+        }
+
         function scanJSDocToken(): SyntaxKind {
             if (pos >= end) {
                 return token = SyntaxKind.EndOfFileToken;

src/compiler/transformers/jsx.ts

@@ -140,7 +140,8 @@ namespace ts {
                 return createLiteral(true);
             }
             else if (node.kind === SyntaxKind.StringLiteral) {
-                return node;
+                const decoded = tryDecodeEntities((<StringLiteral>node).text);
+                return decoded ? createLiteral(decoded, /*location*/ node) : node;
             }
             else if (node.kind === SyntaxKind.JsxExpression) {
                 return visitJsxExpression(<JsxExpression>node);
@@ -213,7 +214,7 @@ namespace ts {
          * Replace entities like "&nbsp;", "&#123;", and "&#xDEADBEEF;" with the characters they encode.
          * See https://en.wikipedia.org/wiki/List_of_XML_and_HTML_character_entity_references
          */
-        function decodeEntities(text: string) {
+        function decodeEntities(text: string): string {
             return text.replace(/&((#((\d+)|x([\da-fA-F]+)))|(\w+));/g, (match, _all, _number, _digits, decimal, hex, word) => {
                 if (decimal) {
                     return String.fromCharCode(parseInt(decimal, 10));
@@ -229,6 +230,12 @@ namespace ts {
             });
         }
 
+        /** Like `decodeEntities` but returns `undefined` if there were no entities to decode. */
+        function tryDecodeEntities(text: string): string | undefined {
+            const decoded = decodeEntities(text);
+            return decoded === text ? undefined : decoded;
+        }
+
         function getTagName(node: JsxElement | JsxOpeningLikeElement): Expression {
             if (node.kind === SyntaxKind.JsxElement) {
                 return getTagName((<JsxElement>node).openingElement);