Recently, a number of listed companies such as Sanan Optoelectronics, Huacan Optoelectronics, Hongli Zhihui, and Dehao Runda have successively issued announcements of obtaining government-related subsidies. From the disclosed information, the maximum subsidy amount is as high as 125 million yuan. The reasons for obtaining subsidies are also diverse, with financial subsidies for science and technology funds; subsidies for investment investment; subsidies for mergers and acquisitions; subsidies for industrial development; and subsidies for enterprises to expand production and income.
Obtained subsidized companies and amounts
Government subsidies enable China's LED industry to achieve rapid development
The so-called government subsidy refers to the fact that enterprises obtain monetary assets or non-monetary assets from the government without compensation, but do not include the capital invested by the government as the owner of the enterprise. The main government subsidies in China include: financial interest subsidies, research and development subsidies, and policy subsidies.
It is an ordinary practice in the world to support or protect the relevant industries in the country through government subsidies. China's LED industry started late, but since its rise in 2003, it has developed into the world's most important LED R&D production base in just over a decade. Taking the LED display industry as an example, according to the relevant data in 2016, the LED penetration rate of Chinese display companies in the US market is around 7%, while in the global LED display output value, China's domestic market is 1.86 billion US dollars, accounting for about 45% of the global market. China’s direct export to overseas is 899 million US dollars, accounting for 22%.
The LED display industry can achieve such results, which are inseparable from the government's support. As a high-tech industry, LED not only has complex technical problems, but also problems in manufacturing processes. In the past, LED production equipment mostly relied on imports and was expensive, which brought a huge burden to LED companies in the early stage of development. And the governments at all levels across the country have made great efforts to support the LED industry, so that China's LED industry can develop rapidly. The government's support for LED companies is wide, the scope is wide, and the time is long. It is often beyond the imagination of ordinary people. Some enterprises have become "subsidized households." Take Sanan Optoelectronics as an example. According to statistics, from 2010 to 2015, Sanan Optoelectronics received more than 3 billion yuan in subsidies.
Among the companies that receive subsidies, there are many small and medium-sized enterprises in addition to listed companies. It can be said that the government's subsidies have alleviated the financial problems encountered in the development of enterprises, and thus played a positive role in promoting the development of the entire industry.
From the perspective of market competition, China's LED companies benefit from the government's huge subsidies, and the international advantages are also very obvious. In order to enhance the competitiveness of Chinese enterprises, in order to encourage more enterprises to go out, the export tax rebate policy implemented by China can be regarded as an alternative means of subsidies.
Enterprises are increasingly dependent on government subsidies
The government's subsidy to LED companies has played a huge role in the development of enterprises and the development of the industry. It is precisely because of the relevant national policies and funds that China's LED industry has achieved such rapid development. However, everything has two sides. In the process of government subsidizing LED enterprises, there are some problems that cannot be ignored in the industry.
For example, in some places, in order to introduce the LED industry, the government has provided millions of or even tens of millions of assistance to MOCVD equipment, which has opened up a precedent for local governments to provide huge subsidies for LED companies, and let other places try to follow suit. The consequence is that the government's support for enterprises has become a major source of income for some LED companies.
In recent years, after years of rapid development, China's LED industry has entered a period of slow growth, and the industry's profits are meager, showing a downward trend, which makes LED companies more dependent on government subsidies, more and more companies are eager to obtain Government subsidies.
This is also the fundamental reason why many domestic LED companies strive to win the title of “high-tech enterpriseâ€. As long as such a "high-tech" signboard is attached, it is easier to obtain government subsidies. In order to obtain subsidies, some companies even do not hesitate to falsify and make various names.
The behavior of “fraudulent compensation†of enterprises is also a secret thing in the industry. In some places, LED companies have always been very active in applying for patents in order to obtain subsidies for research and development. Regardless of whether the patent applied for is useless or not, as long as the application is approved, in addition to receiving research and development grants, a certain amount of patents will be obtained each year, and a small incentive subsidy will be obtained. In this regard, there are even some companies or organizations in the industry that apply for patent services for enterprises. As long as you give a certain amount of compensation, you can guarantee how many patented technologies the company can get each year. There are many behaviors similar to the patent "cheat", so I won't go into details here.
LED companies must learn to lose government subsidies
The government's subsidy for LED companies is intended to promote the development of the industry, but the current subsidies in the industry have brought some negative impacts on the development of the industry. Some people even objected to this kind of government subsidy. Some insiders believe that the government's huge subsidies to LED companies have, to a certain extent, exacerbated the disorderly competition of the domestic LED industry, and it is one of the "accomplice" of LED overcapacity.
Some countries in the West often use this as an excuse for “anti-dumping†and use the “AnalogueCountry System†to impose high tariffs on Chinese enterprises. And as more and more LED companies go out, there will definitely be more and more problems in the future.
However, no matter what problems the government subsidies will bring, it is certain that without the government's subsidies for LED companies, there is no prosperity for our LED industry today. Policy support for the development of China's LED industry can be said to be a great success.
Today, the development of China's LED industry has been almost the same as the international advanced level, and some areas, such as small-pitch display, are even at the global leading level.
In response to the development of China's LED industry, the government's support for LED enterprises will inevitably become less and less. As an LED company, if you still think about relying on government subsidies, the prospects are worrying.
Therefore, as a party to the enterprise, we cannot reverse the original intention and forget the original intention of enterprise development. We always think about how to reach out to subsidize and rely on government subsidies to live, but we must learn to be self-reliant and develop ourselves.
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