The Light Industry Federation stated that export tax rebates are particularly evident in the plastics industry

"We hope that the government's macro-control will be stable and orderly, allowing the industry to develop healthily and lastingly."

In response to the recent plight of some light industrial companies, Guo Yongxin, Director of Industry Research Division of China Light Industry Council, said in an interview with this reporter.

Since the second half of 2007, regulatory policies such as export tax rebates and restricted catalogues of processing trade have been introduced and put into effect. Pressure on export-led processing trade companies has increased sharply, and tens of thousands of enterprises in the Pearl River Delta are facing withdrawal, closure, or relocation. Difficult choice.

Guo Yongxin commented that the relevant departments continued to make heavy fists in order to suppress the surplus, and "obviously broke up."

Just two weeks ago, Guo Yongxin, who was responsible for the analysis of the economic operation of the light industry, completed the research topic of the “light industry policy and regulation strategy” he had written, and proposed the establishment of ten industrial regulation mechanisms that are suitable for market-based competition. "We hope that the state's regulatory means will be diversified and not limited to individual operations." He said that the report has been submitted to the National Development and Reform Commission and the Ministry of Finance and is still waiting for feedback from relevant departments.

Regulation must be smooth and orderly

The current difficulties encountered by the PRD processing trade enterprises are the result of various pressures. Above is the strong regulation of the government, the following is the increase in the cost of labor and the price of raw materials in the upstream, the international market has to face increasingly fierce competition and increasingly stringent standards of product quality.

After implementing the new export tax rebate policy on July 1, 2007, the tax rebate rate for the toy industry was lowered by two percentage points from 13% to 11%. Although the adjustment rate is not very large, for those processing companies whose profit has already been very thin, if these internal and external pressures cannot be digested internally, and no export can be found, it will be very difficult for enterprises to survive.

"Different industries need different strategies for regulation and control." Guo Yongxin said that the toy industry is very export-oriented. If it is purely for the surplus, it can theoretically be adjusted to be a little stronger, but "the toy is also an industry that supports 3 million jobs. Should be considered."

Export tax rebates have a particularly significant impact on the plastics industry. The export tax rebate rate for plastic products has been reduced from 11% to 5%, and the entire industry has therefore reduced tax rebate income by at least US$1.217 billion, accounting for approximately 35% of the industry's full-year profit. The paper products industry was also hit. According to Guo Yongxin’s calculations, the industry’s profit will be reduced by 30%.

According to statistics from Li Guojun, executive vice president of the China Plastics Processing Industry Association, from January to September 2007, exports of plastic products increased by 15.15%, which was an increase of 24.79% in the same period of 2006, and the growth rate slipped by nearly 10%.

What deeply disturbed the relevant industries is that this year's Ministry of Commerce’s adjustment of export tax rebates may further increase. Guo Yongxin’s suggestion is that before the introduction of the regulation and control policy, the scope of industrial hearings should be expanded. If it affects more than 20% of industry profits, it must listen to the opinions of the enterprises.

However, Li Guojun is still optimistic about the situation this year, on the one hand because of energy-saving emission reduction and environmental protection requirements, to promote plastic products continue to replace high energy-consuming industries such as steel and wood, the industry development prospects are good; on the other hand, taking into account the Olympic factors, He believes that there will be no major policy adjustment before September this year.

Recommended ten regulatory mechanisms

The light industry is China's industry with the highest degree of marketization and the strongest international competitiveness. It has been less affected by the regulation of the national policies over the years. Has the successive regulatory actions in recent years meant that light industry will also be included in government regulation?

Many signs have already shown this possibility. "In recent years, heavy chemical development has been rapid, and the proportion of light industry in the national economy has been relatively low." Guo Yongxin said that the National Development and Reform Commission has noticed that the proportion of light and heavy industries is out of adjustment and the government has started to regulate and control the agenda.

Whether it is pressure surplus, expansion of employment, pulling domestic demand, or energy-saving emission reduction, it is necessary to strengthen the macro-control of light industry.

“After the Seventeenth National Congress, light industry has ushered in unprecedented opportunities for development.” Guo said that one of the important reasons is that the same GDP, the energy pollution of heavy chemical industry is three times lighter, and the number of light workers It is 3 times that of heavy chemical industry. He believes that under the pressure of energy conservation and emission reduction included in the performance evaluation, in the coming period, local governments will pay more attention to the development of light industry.

Guo Yongxin’s research on light industry industrial policies and control strategies is launched in this context. “This phased issue solved a problem that is the industry with a relatively high degree of marketization such as light industry, or whether it needs to be regulated.” He said that relevant parties have already stated that competitive industries do not necessarily have to give up control.

In his research report, Guo proposed to establish ten industrial regulatory mechanisms that are suitable for market-based competition, including strategic research and planning mechanisms for joint interaction between the central and local governments, sustainable development mechanisms that focus on energy conservation and emission reduction, and information technology support. The economic operation and forecasting and early warning mechanisms, strategic transformation and promotion mechanisms for improving the foreign trade structure, market access and other administrative regulatory mechanisms, and national fiscal and taxation policy control mechanisms, etc.

All of these suggestions are for one purpose - to avoid unnecessary confusion caused by regulation. “We hope that the regulation and control policies will be more comprehensive, orderly, and appropriate, and that means will be diversified to prevent major fluctuations in the industry and ensure the sustainability of sustainable development,” said Guo Yongxin.