On December 23 and 24, the news of the Chinese government's desire to stop the LED industry subsidy policy was continuously reprinted. The news quoted Taiwan media reports as saying: "The mainland government will require to stop subsidies or tax incentives for LED-related wafer and chip manufacturers." The news also said: affected by this news, LED upstream chip maker Sanan Optoelectronics, China Can Opto's share price fell 0.7% and 1.4% respectively.
Once this news was issued, it caused great concern of the majority of LED business people. From the comments of industry people on this matter, the following points are concentrated: the authenticity of the content, the necessity of canceling government subsidies, and the impact of canceling government subsidies on industries and enterprises. Netizen "a splash of snow" comment: "Cancel the subsidy, why isn't the domestic media first reported it? Seek the truth." Netizen "One Light Master" commented: "I guess it is the obscenity of some enterprises that have not received subsidies." Business people hope that the news is true: "If subsidies are abolished, large and small enterprises can compete fairly in a completely market-oriented environment." But then some netizens retorted: "Even if you cancel the subsidy, what do you compete with others? Scale, technology, cost , brand awareness? So, we still do our own products, constantly improve the technical level, manufacturing level, and constantly improve product quality and product differentiation."
So, what are the advantages and disadvantages of subsidies? The author believes that the benefits of subsidies are as follows:
1. Protection industry and key enterprises avoid survival risks in the initial stage of establishment.
2. Support local industries, support key enterprises, establish benchmark enterprises, and enhance the competitiveness of local industries and enterprises in the industry.
3. Promote research on major technologies and cutting-edge technologies, solve major technical problems under the support and encouragement of the government, and occupy the commanding heights of the industry's technology.
4. Establish industry standards by supporting major technologies and cutting-edge technologies.
5. Enhance the international competitiveness of the industry.
The benefits of removing subsidies are as follows:
1. Create a fair competitive market environment.
2. It is conducive to reducing the friction and risk of exporting.
3. Force companies to improve their overall strength in order to cope with domestic and international competition.
The LED industry subsidy was cancelled and the analysis should mainly include the following reasons:
1. The overall profit of the industry has been declining. Affected by subsidies, the prices of LED-related chips and other products are at an unreasonable low price, which is not conducive to the development of subsidized enterprises, but also seriously affects unsubsidized SMEs.
2. The overall technology of the domestic LED industry has reached a level that can be marketized.
3. The call for the abolition of subsidies is growing.
4. The negative impact of subsidies, including power rent-seeking, bribery, and gray interest chain.
The subsidies for the LED industry will be abolished, and the prices of subsidized companies such as industry-analyzed chips will rise, and the profits of such companies will fall. For the unsubsidized SMEs, “there is nothing to do with himâ€, and there are people in the industry who say this.
Once this news was issued, it caused great concern of the majority of LED business people. From the comments of industry people on this matter, the following points are concentrated: the authenticity of the content, the necessity of canceling government subsidies, and the impact of canceling government subsidies on industries and enterprises. Netizen "a splash of snow" comment: "Cancel the subsidy, why isn't the domestic media first reported it? Seek the truth." Netizen "One Light Master" commented: "I guess it is the obscenity of some enterprises that have not received subsidies." Business people hope that the news is true: "If subsidies are abolished, large and small enterprises can compete fairly in a completely market-oriented environment." But then some netizens retorted: "Even if you cancel the subsidy, what do you compete with others? Scale, technology, cost , brand awareness? So, we still do our own products, constantly improve the technical level, manufacturing level, and constantly improve product quality and product differentiation."
So, what are the advantages and disadvantages of subsidies? The author believes that the benefits of subsidies are as follows:
1. Protection industry and key enterprises avoid survival risks in the initial stage of establishment.
2. Support local industries, support key enterprises, establish benchmark enterprises, and enhance the competitiveness of local industries and enterprises in the industry.
3. Promote research on major technologies and cutting-edge technologies, solve major technical problems under the support and encouragement of the government, and occupy the commanding heights of the industry's technology.
4. Establish industry standards by supporting major technologies and cutting-edge technologies.
5. Enhance the international competitiveness of the industry.
The benefits of removing subsidies are as follows:
1. Create a fair competitive market environment.
2. It is conducive to reducing the friction and risk of exporting.
3. Force companies to improve their overall strength in order to cope with domestic and international competition.
The LED industry subsidy was cancelled and the analysis should mainly include the following reasons:
1. The overall profit of the industry has been declining. Affected by subsidies, the prices of LED-related chips and other products are at an unreasonable low price, which is not conducive to the development of subsidized enterprises, but also seriously affects unsubsidized SMEs.
2. The overall technology of the domestic LED industry has reached a level that can be marketized.
3. The call for the abolition of subsidies is growing.
4. The negative impact of subsidies, including power rent-seeking, bribery, and gray interest chain.
The subsidies for the LED industry will be abolished, and the prices of subsidized companies such as industry-analyzed chips will rise, and the profits of such companies will fall. For the unsubsidized SMEs, “there is nothing to do with himâ€, and there are people in the industry who say this.
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