Private investment is sluggish, and the four departments have taken measures to loosen the constraints and reduce the burden on enterprises
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Text | Caijing reporter Zhang Mingli Intern He Yijing
Edit | Wang Yanchun Zou Biying
On June 13, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance and the People's Bank of China issued the Notice on Doing a Good Job in Key Work of Cost Reduction in 2023 (hereinafter referred to as the "Notice"), proposing 22 tasks in 8 aspects.
These 8 aspects include tax incentives, financial support, institutional transaction costs, labor costs, land raw material costs, logistics costs, capital turnover, and internal potential exploitation.
In terms of enhancing the accuracy and pertinence of preferential tax policies, the Notice proposes to improve preferential tax policies, strengthen support in key areas, and carry out the normalization of governance of enterprise-related fees. In terms of improving the quality and efficiency of financial services to the real economy, the Notice proposes to create a good monetary and financial environment, promote stable and reduced loan interest rates, guide precise drip irrigation of financial resources, continue to optimize financial services, and support small and medium-sized enterprises to reduce the cost of hedging exchange rates.
In terms of continuously reducing institutional transaction costs, the Circular proposes to create a fair competition market environment, continuously optimize government services, and standardize bidding and government procurement systems. In terms of alleviating the pressure on labor costs of enterprises, the Notice proposes to continue to reduce some social insurance premiums in stages, continue to implement some job stabilization policies, and strengthen vocational skills training.
In terms of reducing the cost of raw materials for enterprise land, the Notice proposes to reduce the cost of enterprise land and strengthen the supply and price stability of important raw materials and primary products. In terms of promoting logistics quality improvement, efficiency and cost reduction, the Notice proposes to improve the modern logistics system, adjust and optimize the transportation structure, and continue to implement policies related to road tolls.
In terms of improving the efficiency of enterprise capital turnover, the Circular proposes to increase the intensity of clearing up the arrears of small and medium-sized enterprises. In terms of encouraging enterprises to tap potential internally, the Notice proposes to guide enterprises to strengthen cost control and refined management in the whole process, and support enterprise transformation and upgrading to reduce costs.
Lou Feipeng, a researcher at the Postal Savings Bank of China, told Caijing that in recent years, the National Development and Reform Commission has taken the lead in issuing annual key working documents on cost reduction, putting forward specific measures in terms of taxes and fees, financing, system transactions, employment, land use, logistics, etc., to guide the reduction of costs for market entities such as enterprises, and achieved obvious results. This year's key work of cost reduction will not only maintain the stability of policy continuity, but also highlight the key points and increase the implementation of policies. For example, the implementation period of some preferential tax policies is extended or implemented as an institutional arrangement for a long time, and special anti-monopoly law enforcement actions in the field of people's livelihood are clearly carried out in monopoly fields.
Yang Chang, chief analyst of Zhongtai Securities Research Institute, said that the notice responds to a number of concerns of the current market. For example, the Notice proposes to "carry out special actions on anti-monopoly law enforcement in the field of people's livelihood, increase the intensity of anti-monopoly law enforcement that abuses administrative power to eliminate and restrict competition", "carry out in-depth collection and notification of cases of violation of the negative list of market access", and "strive to break down unreasonable restrictions and barriers set up for enterprises of different ownership systems and enterprises from other places".
The growth rate of private investment has slowed down, and policy support has increased
From January to April this year, the country's fixed asset investment increased by 4.7% year-on-year, of which private investment increased by only 0.4%, which was significantly lower than the overall growth rate.
Lou Feipeng told Caijing that the low level of private investment is related to the poor expectations of market entities; At the same time, residents' consumption demand is insufficient, and there are relatively many products and services produced by private investment in residents' consumption demand, and insufficient consumption demand also leads to a decrease in the enthusiasm of private investment. Moreover, exports are an important area of private investment, and with the gradual release of the backlog of pre-orders, the decline in follow-up orders is also a reason for the sluggish private investment.
The policy side has been increasing its support for private investment. On November 7, 2022, the Opinions of the National Development and Reform Commission on Further Improving the Policy Environment and Increasing Support for the Development of Private Investment was released, proposing to give full play to the traction role of major projects and the leverage role of government investment, and support private investment to participate in the construction of 102 major projects and other projects.
The Notice "loosens" for enterprises at multiple levels. For example, the Notice points out that the policy of reducing unemployment insurance and work-related injury insurance premiums in stages will continue to be implemented, and the implementation period will be extended to the end of 2024. For enterprises that do not lay off employees or lay off fewer employees, continue to implement the universal unemployment insurance job stabilization return policy. Carry out large-scale vocational skills training, and jointly build and share a number of public practical training bases.
For example, the Notice proposes that by the end of 2023, small-scale taxpayers with monthly sales of less than RMB100,000 will be exempted from VAT, taxable sales income with a levy rate of 3% will be levied at a rate of 3% at a reduced rate of 1% for small-scale taxpayers, and 5% and 10% VAT will be deducted for taxpayers in the production and life service industries respectively.
Before the end of 2024, the portion of the annual taxable income of small and micro-profit enterprises not exceeding 1 million yuan will be reduced by 25% and included in the taxable income, and the enterprise income tax will be paid at a rate of 20%; Individual income tax shall be levied on the part of the annual taxable income of individual industrial and commercial enterprises that does not exceed 1 million yuan, which will be halved on the basis of the current preferential policies.
Lou Feipeng believes that this policy will help reduce the employment costs of enterprises, and at the same time help protect the social security rights and interests of individuals. For enterprises that do not lay off employees or lay off fewer employees, continue to implement the universal unemployment insurance job stabilization return policy, which will help stabilize the employment of residents.
It is reported that the "Notice" also proposes to strengthen support in key areas. For scientific and technological innovation, key industrial chains and other fields, targeted tax and fee reduction policies have been introduced, and the policy of increasing the pre-tax super-deduction ratio of R&D expenses of enterprises in eligible industries from 75% to 100% will be implemented as an institutional arrangement for a long time.
The production side is weak, and the accounts receivable need to be accelerated to return
The Notice also proposes to thoroughly implement the Regulations on Safeguarding the Payment of Funds by Small and Medium-sized Enterprises, promote the improvement of long-term mechanisms for preventing and resolving arrears of small and medium-sized enterprises, strengthen the acceptance and handling of arrears complaints, improve the efficiency of the whole process, and focus on supervising the clues of problems with large amounts of arrears, long arrears, and repeated complaints, so as to protect the legitimate rights and interests of small and medium-sized enterprises.
According to data from the National Bureau of Statistics, from January to April, the accounts receivable of industrial enterprises increased by 12.6% year-on-year, up 1.5 percentage points from March, higher than the same period last year by 0.2 percentage points; the average recovery period of accounts receivable was 63.1 days, an increase of 1.3 days from February.
It is worth noting that from January to April, the cumulative inventory of finished products increased by 5.9% year-on-year, continuing to decrease by 3.2 percentage points from April, and the inventory was significantly degraded; the turnover days of finished products of industrial enterprises were 20.8 days, 0.2 days longer than February.
Lou Feipeng believes that the proportion of accounts receivable of small and medium-sized enterprises is relatively high, and it is particularly necessary to increase efforts to solve the problem of arrears. At the same time, it is also necessary to revitalize the accounts receivable of small and medium-sized enterprises through financial means, such as carrying out receivables pledge financing and factoring for high-quality receivables to enrich the cash flow of small and medium-sized enterprises.
Yang Chang said that from the recent accounts receivable data in the profit data of industrial enterprises, the notes receivable and accounts receivable continued to grow, and the year-on-year growth rate continued to increase, and the notice is conducive to promoting the accelerated return of accounts receivable and ensuring the cash flow security of small and medium-sized enterprises.
It is worth noting that the overall production performance has been relatively weak recently. According to data from the National Bureau of Statistics, in April, the year-on-year growth rate of the industry rebounded, but the month-on-month growth was negative. In April, the added value of industries above designated size decreased by 0.47% month-on-month. From the production of some major industrial products, the average daily output of steel, cement, non-ferrous metals, automobiles, and power generation in April was lower than in March.
The PMI fell out of the boom range again in April, reflecting that industrial production in April was weaker than in March. Considering that the added value of industries above designated size fell by 2.9% year-on-year last year, the growth rate of industrial production recovered to 5.6% in April, and the average compound growth rate of the two was lower than expected.
In terms of reducing the cost of raw materials for enterprise land, the Notice also proposes to continue to promote the "standard land" transfer of industrial land, and encourage the use of long-term leasing, lease-later transfer, flexible term supply and other ways to supply industrial land; Do a good job in ensuring the supply and price of energy and important raw materials, continue to implement a zero-tariff policy for coal imports, consolidate the ability to guarantee domestic resource production, strengthen the docking of raw material production and demand, and promote the upstream and downstream linkage of the industrial chain.
In terms of improving the quality and efficiency of financial services to the real economy, the Circular points out that it is necessary to implement a prudent monetary policy, maintain the basic stability of the RMB exchange rate at a reasonable and balanced level, and promote the steady reduction of loan interest rates. Guide the precise drip irrigation of financial resources, make good use of inclusive small and micro loan support tools, continue to increase the first loan, renewal loan and credit loan of small and micro enterprises, guide financial institutions to increase the investment of medium and long-term loans in the manufacturing industry, and strengthen credit support for innovative, technology-based, specialized and special new small and medium-sized enterprises.
In addition, the Notice proposes to continue to optimize financial services, continue to implement the policy of fee reduction and compensation for financing guarantees for small and micro enterprises, promote the incremental expansion of financing coverage for small and medium-sized enterprises, and reduce the cost of financing guarantees. Support micro, small and medium-sized enterprises to reduce the cost of exchange rate hedging, strengthen government, bank and enterprise cooperation, and increase support for exchange rate risk management for small and medium-sized enterprises.
Lou Feipeng said that from the price and other aspects of data, the problem of weak demand is prominent, in this case, it is necessary to make policy efforts to stabilize demand, and guide the production side to expand investment through increased demand, so as to achieve stable production.
Yang Chang pointed out that the Notice is conducive to helping enterprises reduce their burdens in stages by reducing the costs of enterprises in the real economy. However, more importantly at this stage, in the face of the pattern that the downstream demand of enterprises is still weak, how to promote the expansion of downstream demand through accurate policy design, while taking into account the orientation of high-quality development, and then help the operation of enterprises in the real economy to further improve, may be the focus of further consideration of policies.