Zhejiang Province Reduces Costs for Textile Enterprises

A few days ago, a well-known garment company in Haining received a product order of nearly 10 million yuan. However, the person in charge of the company was not happy: He calculated a sum for the reporter. The gross profit margin of this order was about 33%, but the net rate was only 0.3%. "The profits are eaten by the cost," he said with emotion.
The situation in this company is not an example. According to a survey conducted by the Zhejiang Economic and Information Commission, in recent years, the average annual growth rate of labor compensation for industrial enterprises above designated size in Zhejiang Province has exceeded 15%, and the average annual growth rate of taxes exceeds 7%. However, the growth rate of corporate sales profit rate has always been It is about 5.5%.
In recent years, Zhejiang province has made frequent attempts to reduce costs and reduce costs for enterprises. In particular, the reform of “four lists and one net” has significantly reduced the cost of project approval for enterprises. With the reforms entering deep-water areas, the short supply of the system in our province has become more prominent, and the burden of enterprises such as institutional transaction costs remains to be reduced. Recently, the results of a survey conducted by the relevant provincial departments on the cost burden of the 300 manufacturing companies in 11 cities, districts and cities showed that among the 300 corporate samples, the proportion of enterprises with increased transaction costs in 2015 was still as high as 62.5%. Enterprises believe that the burden of this cost is the heaviest. To this end, the reporter recently conducted a return visit to some companies to learn more about the details.
Institutional transaction costs are high. Where is the height?
Institutional transaction costs seem to be indirect, but they can be seen in a region's investment soft environment.
At present, the number of administrative licenses actually implemented at the provincial level in Zhejiang Province has been reduced from 1,000 to 283, and non-administrative permit approvals have been completely cancelled. However, the reporter’s investigation found that there are still many links for approval, approval, filing, licensing, certification, certification, inspection, testing, and other links in manufacturing enterprises’ investment in production and operation. Government departments establish rights, assessments of intermediary agencies, and affiliate charges. The management model has made many entrepreneurs feel burdened. In particular, there are still a number of charging items in various types of administrative approvals such as investment project construction, commercial registration, product (appliance) inspection and verification, and so on.
In the examination and approval of investment project construction, according to the incomplete statistics of a company, it is necessary to pay more than 10 types of project fees. A 30-mu land construction project of the company requires only 3.7 million yuan for the project construction margin and civil construction construction margin.
A company reported that in order to prepare for the listing of the company, the name of the company must be changed (other registrations are unchanged), and in the course of handling the change, a variety of charging items totaled more than 2 million yuan.
In terms of inspection of products (apparatuses), the gas pipeline pressure elements produced by a company must be tested by the local special equipment testing center before the ex-factory (the testing fee is 8 销售额 of sales). However, after the products leave the factory, they need to enter the foreign market. The inspections were conducted at the place of sale, and the contents of the tests remained basically unchanged; before a new product of a floor company in Hangzhou was listed, nearly 30 different types of environmental protection tests were completed in several cities according to regulations, and the charge for each test exceeded 10,000 yuan. A complete test report costs at least 300,000 yuan.
The lengthy and time-consuming process of investment approval has also caused many entrepreneurs to worry. A person in charge of the company told reporters that regardless of the land acquisition factor (usually taking 6 months), it took 9 months from project approval to the acquisition of a construction permit, plus the coordination of the existing approval links, from project approval It usually takes two to three years to complete the production and some may last for five or six years. This not only increases the company's capital costs, but also makes it easier to miss business opportunities.
As most intermediary agencies are licensed by the relevant approval authorities, there is inextricable linkage between the intermediary service agencies and related departments. Some intermediary agencies still have monopolistic operations, and the charges are relatively high and non-standard. Many industry associations and administrative institutions that adhere to administrative departments, enterprises, and institutions use the administrative examination and approval, inspection and testing, technical evaluation, and certification and issuance. It is mandatory to require companies in the industry to join associations, learn to collect fees, and collect annual fees. Yuan, as much as tens of thousands of dollars, make entrepreneurs extremely resentful.
“The appraisal of public appraisals, water appraisals, energy appraisals, and environmental assessments ranged from tens of thousands of yuan to more than 200,000 yuan. After our companies paid an intermediary with an appraisal fee of 150,000 yuan, the staff of the intermediary agencies lacked corresponding work. Qualifications and business abilities have not made any changes to the company's projects, resulting in the failure of the company's projects to pass the examination and acceptance, and they have to make a comeback.” A person in charge complained.
In the labor-intensive manufacturing enterprises, social security costs are also a burden for companies. “An employee’s monthly labor cost is 8,000 yuan, after deduction of the 'five risks and one gold' fee, the employees get less than 5,000 yuan, and the social security expenses account for more than 40%. Our company’s 2015 profit is more than RMB 40 million, regardless of the provident fund expenditure, only Workers' 'five insurance' expenditures amounted to 6.89 million yuan," a person in charge of a furniture company told reporters.
Many manufacturing companies account for the high proportion of taxes in production costs.
Some preferential policies introduced by the state are sometimes discounted during the landing process.
To reduce the burden on enterprises, how to continue to exert force?
Many interviewed entrepreneurs bluntly stated that “the most fundamental measure to reduce the burden on enterprises lies in promoting the decentralization of administrative power.” These entrepreneurs expect that many transaction costs that have a large impact on enterprises, including approvals, intermediary services, etc. Further reforms.
Institutional transaction costs are invisible, intangible, no statistics, and no data, but they all exist in large numbers. Helping enterprises to reduce costs is not only an effective way to increase the economic efficiency of enterprises, but also an objective need to enhance corporate confidence and enhance corporate investment capabilities.
“In connection with Zhejiang, our province still needs to continue to reform the enterprise investment approval system, continue to expand the scope of enterprise investment projects and no longer approve the scope of pilot projects, strictly implement zero-land technology changes and no longer approve policies, and continue to vigorously promote efficient examination and approval.” In a survey conducted by the provincial CPPCC, it was suggested that intermediary services should also be regulated. On the one hand, it is necessary to nurture an intermediary organization system, improve intermediary service quality and reduce intermediary service fees through market-based competition, and on the other hand, strengthen intermediary service agencies. Supervision, the introduction of service standards, service processes, clear charges.
“To reduce the institutional transaction costs, we must closely integrate with the supply-side structural reforms. In particular, through structural tax cuts, simple administrative and decentralization, and other reforms, we should optimize government management, improve the efficiency of government management, and promote government public service functions. At the same time, stimulate the enthusiasm and creativity of all subjects, give full play to the talents of entrepreneurs, and mobilize the enthusiasm of enterprises,” said Wu Weiqiang, a professor at the School of Politics and Public Administration of Zhejiang University of Technology.
On April 8 this year, Zhejiang Province announced the "Several Opinions on Further Lowering the Cost of Enterprises and Optimizing the Environment for Development" and launched 30 cost reduction measures. “Next, the Provincial Reduction Office will study and formulate the 'Three-year Action Plan for Enterprises to Reducing Their Burdens in Three Years' and carry out a special action to reduce the cost of real economy enterprises. Through a series of combined punches, the reform dividend will be released, and there will be no charges outside the list and no rebound. Institutional arrangements will be carried out to support the development of economic enterprises in the real economy to promote the establishment of a long-term mechanism to reduce the burden on enterprises and reduce the cost of enterprises.” The person in charge of the Provincial Economy and Information Commission introduced the plan.


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