LED industry "Dabu" investment debate

Small and medium sized projects regardless of the office of the streets, the district government investment attracted, or provincial level a large project investment, domestic competition is very intense, preferential policies and supporting industry throughout the competition, and service attitude in e-government environment. Wanjiang City belt to undertake industrial transfer, the introduction of new industries, preferential policies contributed. A case study of LED industry, as the emerging industry in Anhui, Wuhu to become the domestic upstream LED catch up from behind, industrial agglomeration, subsidies also catch up from behind.

The pattern of financial subsidies for equipment began in 2009 in Jiangsu, Wuhu, followed by Guangdong, Anhui, and in the. Local governments generally use the way of tax subsidies, which is the norm around the introduction of investment; Yangzhou model is different from the cash payment. For example, the LED wafer production enterprises purchased by MOCVD furnace to grant funds, the red light MOCVD subsidies 8 million yuan / Taiwan, blue and green 10 million yuan / Taiwan; equipment in place after the subsidy of 50%, pilot grants 30%, 20% retainage after mass acceptance. Time attracting canyuan photoelectric, photoelectric, neon Blaupunkt and many other LED upstream manufacturers in Yangzhou. Wuhu to follow, but the threshold is set to the number of high enterprise MOCVD must be more than 50, but the subsidy increased 20%, red yellow, blue and green respectively referred to 9 million 600 thousand yuan, 12 million yuan per unit, preferential policies and other city distance.

Soon, the effect of investment in Wuhu show. In January 2010, three optical signed a 12 billion yuan investment project LED and Wuhu municipal government; in February, Wuhu municipal government and Elec-Tech signed a total investment of 6 billion yuan of LED project; the two companies planning MOCVD super 200. In just one month, Wuhu completed a year before the completion of the Yangzhou investment plan. Yangzhou municipal government in July 2011 after the continuation of the subsidy policy (in 2009 when only two years). Similarly, Wuhu actually has no longer will implement the subsidy policy for other equipment manufacturers, two years ago when the successful introduction of Sanan optoelectronics, two large projects have been Elec-Tech achieve investment objectives.

The MOCVD equipment price equivalent to RMB 3000 yuan, LED chip manufacturers get subsidies equivalent to more than 30% of the equipment, the supplier selection project landing has important reference value in where, because not only is the amount of subsidies, but also means that local support is much. According to public information statistics, Wuhu in 2011 on the two project financial subsidies amounted to $900 million, accounting for 28 billion 600 million of fiscal revenue in the year of 3%. Local governments are willing to pay a huge amount of subsidies, the project itself has a strong impetus to the success of the project, there will be a variety of good supporting services, once the project fails, the government is also under pressure to bear huge.

This binding and the government's investment model is very common in emerging industries. Not only LED, but also the photovoltaic industry. Despite the serious excess capacity in the industry, a large number of enterprises have a huge financial black hole, but the local government at all costs to borrow money, raise money, hoping to help companies tide over difficulties. We all know that companies should be eliminated in order to make room for the market, but feel that local businesses can not be closed.

Similarly, the introduction of Hefei BOE was once controversial. The BOE panel industry is capital intensive, built in Hefei sixth generation TFT - LCD production line, opened in 2009, production by the end of 2010, the company in 2009 700 million to rely on government subsidies barely profitable, most huge subsidies from the Hefei government; in June this year, Hefei project finally realized monthly earnings, while the BOE in the third quarter to achieve a single season earnings, which pick up, and the panel industry and Hefei 6 generation line full production have a great relationship with pin. Hefei's Government may be a lot less pressure. Hefei government's abacus is: in 12th Five-Year by the 6 generation of the BOE Hefei line pull investment of $80 billion. However, things are not over, the second half of this year to build the 8.5 generation of Hefei line, with a total investment of $28 billion 500 million, more than the size of the 6 generation line investment. If the BOE really sustained profitability, performance inflection point, happy; if the industry boom, the dispute may also continue.

Study on public finance budget experts, China network founder Wu Junliang said, the domestic local investment model in foreign countries is not the premise of this model is to determine where the heads of local fiscal expenditure; preferential policies from tax rebates, land concessions evolved to cash subsidies, local investment is more intense, also restricted the local leadership by the very small. Wu Junliang said that this is not a question, but why only subsidize the industry? A lot of industries to solve employment, tax contribution, or subsidies? In addition, financial subsidies to the public budget, the government proposed, National People's Congress, the society, and that the social expression channels, society not only knew what the project benefits, also knew what the risk, so as to reduce the official is not understanding the extent, also can reduce the local leadership for the performance and the impulse and free.

The advantage of the financial subsidy model is that it can quickly attract large projects, or even a short period of time to form an industrial agglomeration effect, the controversy is the problem of government positioning. Today, the market is not as good as the mayor to find the slogan of re popular. After emerging industries will continue to emerge, researchers believe that the industry should be "for the mayor", but "mayor" not to spoil things by excessive enthusiasm disorderly competition in the industry, and make some enterprises blindly expand, in the "find the market" has been unable to support, finally become a burden.