LED special funds for approval why tricky constantly

According to reports, the use of his office management of state special funds, corporate treasury secretary Chen Zhubing former director general office of each relevant enterprise grant special funds to enterprises in accordance with the requirements of 20% to extract commissions, by this means Chen Zhubing alone or together with others, illegally accepting corporate property totaling 24 million 540 thousand yuan.

The government set up special funds to support a particular industry or industry of good intention, but the management of the opaque but make a good thing, the breeding of chaos and the unspoken rule, this is not only a waste of state funds, in fact also undermined the market competition equilibrium, and even affect the industrial development. Recently, Guangdong provincial science and technology department director Li Xinghua was found tellingly, Li sacked and finance of Guangdong Province invested 450 million yuan each year to establish special funds for the development of LED industry in the shady, unspoken rule, many LED companies work, obsessed with subsidies. Huge subsidies were state owned listed companies, good government relations away, some enterprises even get subsidies the shell, while at the same time because of the information asymmetry, part of the central enterprises do not even know that there are some policy subsidies.

In the case of the lack of effective management, the more government subsidies, sometimes the more side effects. In recent years, the typical counter example occurs in the photovoltaic industry. In the photovoltaic industry, too abundance of government subsidies to misleading for many enterprises, they are not riveting enough strength to compete for the market, improve the quality and reduce the cost, but try to please the government, the blind expansion of investment, in order to enter the list of subsidies, eventually the photovoltaic industry overcapacity, frequent problems.

In addition, it is worth reflecting on the government to support a particular industry to give subsidies to specific enterprises, such a model is reasonable. In reality, the government can get subsidies, often larger, better relations with the government or enterprises, these enterprises to obtain subsidies, strengthen its competitive advantage, caused the strong constant phenomenon, greatly suppress the small business survival. Moreover, subsidies to enterprises, but also easily lead to trade disputes, the recent Central European Photovoltaic dispute is an example.

Under the market economy, the government's intervention in the economy as little as possible, to create an equal competitive environment, a reasonable tax burden, give full freedom to the enterprise, this is the best support for an industry. In this sense, the practice of special funds to help specific industries, in fact, the less the better. Reduce subsidies, subsidies for the retention of capital projects, simplify approval, strengthen supervision, promote transparent operation, so as to cure the underlying rules of special funds for approval.