At the ninth meeting of the Standing Committee of the 12th National People's Congress held recently, Auditor General Liu Jiayi of the National Audit Office made the "State Council's Audit Work Report on the Implementation of the Central Budget and Other Financial Revenues and Expenditures in 2013" to the Standing Committee of the National People's Congress. The report pointed out that local governments concealed revenue of 82.3 billion and illegal subsidies of 126.1 billion. At almost the same time, Xiamen Cinda, Huacan Optoelectronics and other listed photovoltaic companies announced information on receipt of financial subsidies and funding from governments at all levels. Subsequent investigations by Nandu reporters found that photovoltaic and LED companies have become the easiest companies to obtain government subsidies in recent years, and many private companies rely on this advantage to obtain subsidies. However, driven by the temptation of generous profits, the chaos of local financial subsidies has not subsided.
The real money the Chinese government invests in photovoltaic and LED companies is enough to make other industries envious. Take Sanan Optoelectronics, known as the "big brother" of domestic LED chips, as an example. The public financial report shows that if the amount of government subsidies received by Sanan Optoelectronics from 2010 to 2013 is compared with the net profit of that year, the results are 60%, 86%, 60%, and 45.7% respectively.
Such subsidy cases are not uncommon in the photovoltaic industry. Public information shows that in the first quarter of 2014, Zhongli Technology received a government subsidy of approximately 3.74 million yuan, but its performance still reported a loss. The net profit attributable to shareholders of the listed company was approximately -112 million yuan. After Huacan Optoelectronics received a government subsidy of about 136 million yuan in 2013, it still lost 8.62 million yuan for the whole year. Specific to the Guangdong market, during the "Twelfth Five-Year Plan" period, the Guangdong Provincial Finance Department plans to invest 450 million yuan each year to establish a special fund for the development of the LED industry.
What went wrong with China’s “photovoltaic and LED subsidies”?
The answer emerged from the audit report released by the National Audit Office in June 2013. The report shows that the high-power LED green lighting project of Anhui China Energy Conservation Investment Co., Ltd. defrauded the central government of 9.9 million yuan in investment subsidy funds for key energy-saving projects through false declarations. Guangdong Xuelite Optoelectronics Technology Co., Ltd. defrauded 3.455 million yuan in subsidy, and Dongguan Baidu Technology Co., Ltd. defrauded 232,000 yuan in subsidy.
An industry insider who did not want to be named said frankly that who will determine whether it meets the subsidy standards? There is a lot of room for rent-seeking.
At the ninth meeting of the Standing Committee of the 12th National People’s Congress held recently, Liu Jiayi, Auditor General of the National Audit Office, held an “extended version” of the audit report from previous years, and part of the extra space was used to criticize “illegal subsidies.” Liu Jiayi directly stated the key points in the report, "Because there are many types of special fiscal funds, miscellaneous projects, and many departments involved in the allocation. They are reviewed and reported by the grassroots level, and information communication is not smooth. In addition, review and supervision are not in place, and the problem of fraud is serious."
According to statistics from the National Audit Office, in 2013, local governments concealed revenue of 82.3 billion and illegal subsidies of 126.1 billion.
Road map: To apply for subsidies, you have to "pass through three hurdles"
If companies want to get government subsidies, they have to pay attention to their methods
An LE in Guangdong Province Zhang Wei (pseudonym), chairman of Company D, revealed to Nandu reporters, "There are a conservative calculation of 6,000 LED companies in the province, and no more than 100 can receive subsidies each year. The probability of large listed companies receiving subsidies is significantly higher than that of small and medium-sized enterprises."
According to his introduction, if an LED company receives hundreds of thousands or even millions of government special subsidies, it must pass at least "three hurdles." The first step is to pass the Guangdong benchmarking system certification. To put it bluntly, it is the "Guangdong standard" of LED products. For example, the "application direction three" in the LED industry commonality and key technology integration (topic number 0802) includes the following acceptance conditions: at least 3 products have passed the Guangdong Province standard optical component review and entered the Guangdong Province standard optical component product coding catalog. This means that to join the benchmarking system, you must go through a series of product and factory testing and certification.
The next step is to pass the second level: once a company joins multiple LED industry alliances, its chances of obtaining subsidies will be much greater. Then, the alliance recommends entering the "flower list", and then passes the expert review level, which is the third level.
In addition, major projects can also give you extra points. Sun Yanbiao, the former editor-in-chief of "New Industry" magazine, said, "If everyone is working on key projects, it depends on whether the scale of your project is large enough.
Filling loopholes
From "pre-subsidy" to "post-subsidy"
In fact, the government has discovered loopholes in the subsidy policy and is changing the previous rough subsidy method. Nandu reporters have learned from many sources that in the past, it was more of an "ex-ante subsidy", that is, the project investor received the subsidy before the project started, but now it tends to be an "ex-post subsidy."
Taking Chongqing as an example, the local government stipulates that if mobile phone panel manufacturers supply products to Chongqing customers, each product can be subsidized by a few cents or cents for each mobile phone panel sold. In this way, when downstream products are purchased, prices are reduced accordingly, which is equivalent to both upstream and downstream enjoying subsidies.
In addition, since this year, the Guangdong Provincial Science and Technology System has launched a "Sunshine Reconstruction Action" to promote the disclosure of the entire process of special investment in science and technology. Key node information such as guide preparation, project application, project approval results, and project achievements of science and technology projects are fully open to the public. At the same time, "trace" management covering the entire process of technology business can ensure that responsibilities are assigned to people and tracked effectively.
According to the National Audit Office, Guangdong Xuelite Optoelectronics Technology Co., Ltd.’s high-efficiency lighting product promotion project obtained 3.455 million yuan in central government subsidies for the promotion of high-efficiency lighting products by declaring lighting products sold to bulk users in the form of residential users.
Why can we get millions more subsidies by simply changing the declared user types? This starts with the introduction of subsidy policies. On December 28, 2007, the Ministry of Finance and the National Development and Reform Commission jointly issued the "Interim Measures for the Management of Financial Subsidy Funds for the Promotion of High-Efficiency Lighting Products". The subsidy funds are directly provided by the finance to the winning bidder, and then the winning bidder sells them to end users at the agreed supply price minus the fiscal subsidy funds, making bulk users and urban and rural residents the ultimate beneficiaries. Specifically, "For each high-efficiency lighting product for bulk users, the central government will provide a subsidy of 30% of the supply price of the successful bid agreement; for each high-efficiency lighting product for urban and rural residential users, the central government will provide a subsidy of 50% of the supply price of the successful bid agreement."
A reporter from Nandu checked the Sherlett announcement and found that from 2008, the first year when the subsidy policy was officially implemented, Sherlett Company has won the winning contract for five consecutive years. For example, in 2009, the company received 8.4 million high-efficiency lighting product promotion tasks; in 2011, the company received another 1.8 million high-efficiency lighting product promotion tasks.
According to the "Audit Decision of the Audit Office on the Resources and Energy Conservation and Utilization Expenditure Funds of Guangdong Province from 2011 to 2012" issued by the National Audit Office, the "Notice on the Recovery of Central Financial Subsidy Funds" issued by the Guangdong Provincial Department of Finance and the Foshan Municipal Finance Bureau The "Notice of the Foshan Municipal Finance Bureau on the Recovering of Central Financial Subsidy Funds" released by the Foshan Municipal Finance Bureau revealed that during the promotion of high-efficiency lighting products from 2010 to 2011, Guangdong Xuelite Optoelectronics Technology Co., Ltd. declared 1.9912 million lighting products sold to bulk users as residential users, defrauding a total of 3.455 million yuan. In other words, as long as the user type is changed when applying, each product can receive an additional subsidy of more than 1.7 yuan on average.
It is understood that in September 2013, Xuelite Optoelectronics Technology Co., Ltd. returned the amount to the Finance Bureau of Shishan Town, Nanhai District, Foshan City.
ccogene's reporter: Jin Yingshu, Zhou Yong, interns, Li Siyi, Yang Enjie
Pan Zhigang: There are many ways out for the photovoltaic industry, with a wide range of market applications. For example, using solar energy to charge electric vehicles is clean and clean. Another example is advanced manufacturing. Technologies such as lasers and artificial intelligence can be combined with photovoltaic technology, rather than just being limited to lighting LEDs.
ANNA