Should government subsidies be abolished?

For the lighting industry, LED subsidy is not a new word, the Chinese government began to subsidize the LED lighting industry since 2009, the central government has been 6 consecutive years of semiconductor lighting industry subsidies, subsidies in support of the LED industry, especially the LED chip industry indeed ushered in a spurt of development, but this development the industry called the abnormal development of unhealthy. In particular, accompanied by subsidies to unfair, corruption, dependence and other issues is much criticized.

Cancel the LED subsidy has long been the voice, but in the past one or two years more and more lively, the government seems to have become rational, began to subsidize reform on the road.

Cancel subsidies rumors rampant

Signs of reform began in mid March 2013, Shenzhen suddenly abolished LED industrial planning, which was interpreted as a return to the outside world LED subsidy policy rational performance.

Since then, the government has also released a signal to cancel or suspend subsidies. But it caused an uproar in the industry or the recent media to "cancel subsidies" full of sound. December 23, 2014, Taiwan media reported that: the Chinese government will require the cessation of LED related wafer and chip manufacturers to provide subsidies or tax incentives. Such subsidies undermine the market mechanism, and may violate the rules of the WTO. "This news, the mainland will lead to a number of benefits of government subsidies LED chip enterprise stock price decline, LED upstream chip manufacturers Sanan optoelectronics, HC semitek shares fell 0.7% and 1.4% respectively.

The source of rumors began with a notice in December 19, 2014, "the State Council on clean up and standardize the taxation and other preferential policies of the notice" (hereinafter referred to as the "notice") issued the "notice" of various tax concessions requires a comprehensive clean-up of existing, the general provisions of Chinese to promote the development of regional economy, tax, non tax and some areas fiscal expenditure on the implementation of preferential policies, while promoting investment and contributed to the industrial agglomeration, but also disrupted the market order, the effect of macro-control policies, even in violation of commitments, lead to trade friction, the provincial government to clean up the situation report to the Ministry of finance the project in March next year.

The "notice" requirement: without the approval of the State Council, all regions and departments shall not provide financial incentives for enterprises. The illegal and establishment of enterprises and the investors (or managers) preferential fiscal expenditure policy to pay tax or non tax income, including tax refunds, lieshouliezhi, financial incentives or subsidies, or to pay subsidies and other forms of land revenue relief, resolutely cancel. "

This policy will be applied to the LED industry, that is to say, local governments to attract LED chip companies settled in investment, with financial subsidies, must be approved by the State Council, the approval has been significantly tightened.

Although the abolition of the rumors of the increasingly intense subsidies, but has not yet heard the official voice confirmed. The companies have also indicated that there is no news of the cancellation of subsidies, the relevant policies have not yet issued. According to the Au Optronics Co marketing center director Linyida Jingyuan said, "Hongtouwenjian December 19, 2014, cancel the preferential tax, according to the local time for tax preferential subsidies and tax return of LED industry, enterprises need to at the end of March 2015 submitted to the State Council for review, and these documents have not been implemented, are related to speculation and media enterprises. LED, all the peers have not received the relevant notification, whether to cancel the LED subsidies this conclusion, to the end of March 2015 the State Council for approval to finalize. "

Can you please cancel each one sticks to his argument

We also really cancel subsidies but spread rumors can make nothing of it, at least show that this sign will eventually develop into a prairie fire, sparks of fire, we may find some traces from these policy signals. But for subsidies should cancel this topic, but there is a serious polarization of the lighting industry, there are cheers, but also bad mouthing.

Pro: the abolition of overwhelming

Those who agree to cancel subsidies have said that subsidies have completed the historic task, it is time to withdraw from the stage of history.

Shenzhen laucal Cci Capital Ltd investment adviser Huang Jian believes that the government cancel energy-saving products subsidies is inevitable. He said that the principle of the market economy is free competition, the existence of government subsidies can only be a temporary move to participate in government decision-making guidance. Today, the application of LED has been very extensive, and into which the enterprise or project has been to the point of excess, and then government subsidies will lead to excess capacity, is not conducive to the long-term stable development of the industry.

Cancellation of subsidies, the surface is a bad thing, in fact, is a good thing. "The general manager of Shenzhen Austria Cheetos Lighting Co. Ltd. Lin Qing Qi bluntly pointed out that, he said, the beginning of government subsidies are upstream of the LED industry, promote the upstream enterprise capacity development spurt, thus spawned a false prosperity, and leading to the serious excess capacity, the formation of deviation from the value and price of upstream products. That wayward into people like a swarm of bees in the middle and lower reaches of the ranks. As a result, LED lighting products disorderly competition, low-quality products popular, vicious circle. Seriously affect the image of the LED industry, which has a high technology content, and destroy the market environment.

Teyoushi photoelectric technology (Shanghai) Co., Ltd. chief operating officer He Wei indicated that, after several years of rapid development, LED industry has gradually matured, the government