The State Council’s move to reduce the burden of the three-pronged emergency economy

Following the “Stable Growth” package on April 1st, Premier Li Keqiang chaired the State Council executive meeting on April 8th and decided to clean up and regulate the fees charged by enterprises and reduce the average price per kWh of coal-fired power generation by about 2 points. The price of electricity and industrial and commercial electricity is about 1.8 cents per kWh, and the proportion of iron ore resource tax is reduced according to law.

The industry believes that the growth rate of GDP growth in the first quarter is a foregone conclusion, and the growth rate of electricity consumption is also as low as 1%. The economy is still facing a severe situation in the second quarter. To this end, the State Council's three measures of reducing fees, price reforms, and tax cuts are “emergency”, directly reducing the burden on enterprises and supporting the development of the real economy. Only the cost of industrial and commercial power cuts can reduce costs by more than 80 billion yuan.

The downward pressure on the steady growth of the economy has become a foregone conclusion

After the important data in the first two months of 2015 was lower than expected, the Chinese economy’s “cold spring” situation continued in March. "In March, the whole society's electricity consumption is expected to be negative growth, which is more pessimistic than our previous expectations." Ouyang Changyu, deputy secretary general of the China Electricity Council, told the "Economic Information Daily" reporter that this year from January to February this year The electricity consumption of the society increased by 2.5% year-on-year. The growth rate of electricity consumption in the first quarter may be below 1%, while the previous forecast was below 2%.

Consistent with this situation, the coal consumption of the six major power generation companies in March increased by 20% year-on-year, close to the August low. The initial value of HSBC PMI in March was 49.2, a sharp decline from February and a low since May last year. "In combination with these data, the domestic economic momentum is weak in March, which is a high probability event. The GDP growth rate in the first quarter of this year is a foregone conclusion." Gao Shanwen, chief economist of Essence Securities, judged.

Wang Zecai, a researcher at the Finance Department of the Ministry of Finance, also believes that China's economy is still in a slow process of de-capacity, deleveraging, and de-bubble. In March, China's economic downward pressure has increased. It is expected that GDP will grow by about 7% in the first quarter, while the economic operation situation in the second quarter. More serious. On the basis of clearing tax incentives and standardizing local government debts, the State Council executive meeting issued policies on clearing the charges for enterprises, lowering the price of coal and electricity, and lowering the tax rate of iron ore resources, which is to reduce the burden on enterprises and support entrepreneurial innovation. Promote the healthy development of the real economy.

"This year's GDP target is only 7%, which is much lower than last year. There is no problem in achieving this goal, but it still depends on policy stimulus." Su Jian, executive deputy director of Peking University Economic Research Center, explained to the reporter of the Economic Information Daily. The three policies introduced in the second stage belong to supply management. On the one hand, it is conducive to curbing inflation. This year, the overall situation of low expansion has been determined. On the other hand, by lowering the cost and directly affecting the profitability of enterprises, the most important thing is to adjust the structure directly. Measures such as tax cuts and fee reductions are directed at certain types of businesses.

In fact, this is only part of the “steady growth” policy combination. On April 1, the State Council just deployed a revitalized and coordinated use of deposited stocks of financial funds, determined measures to accelerate the development of e-commerce, and decided to appropriately expand the scope of investment in the national social security fund. "This is a demand management policy. The direct stimulus to economic growth is more obvious, but the result may be that the asset price bubble will swell, but supply management will not have this sequela, but the stimulus effect is not so fast and obvious, so the two policies need Cooperation." Su Jian said.

Clearing expenses to clean up administrative fees for enterprises

The meeting confirmed that it will focus on half-year to carry out special operations, comprehensively clean up the administrative fees and government funds related to enterprises in the country, involving administrative and administrative pre-emptive, market supervision and access, and other mandatory monopoly service and service charges, industry associations. The Chamber of Commerce involves the charging of enterprises, such as decentralization and decentralization, integration of management, transformation of government functions, establishment of rules and regulations, and the use of a legal, standardized and transparent management system to curb "willful" charges and dig up the "roots of disease".

Gao Yuwei, a researcher at the Strategic Development Department of the Bank of China International Finance Research Institute, said that cleaning up the norms related to enterprise charges is the implementation of the previous policy commitments, striving to make a statement, prohibiting the line, effectively reducing the burden on enterprises, and helping to improve the business environment. Stimulating the vitality and development of the company will help stabilize economic growth.

In addition, it is worth noting that in the case of economic downturn, local government income is difficult, it is inevitable that the name of the local government will be arbitrarily raised, and new charging policies will be introduced to compensate for the decline in government revenue. Experts believe that the measures of the State Council executive meeting also play an important role in restraining local behavior.

Specifically, the meeting stipulated that self-examination and supervision of more than 600 fee regulations for cancellation, suspension and reduction by the central and local governments last year must be put in place. Where there is no legal and regulatory basis and it is not approved in accordance with the regulations, the project-related fund projects established by the ultra-rights will be cancelled, and the act of raising the levy standard and expanding the scope of levy will be resolutely corrected. All administrative examination and approval intermediary services and fees without legal basis are cancelled.

Systematic clean-up of various fees and government funds, especially those with government power, in the name of business, in the name of social organizations, mandatory collection of various fees, agency fees, service fees, has become the consensus of all parties. "This is the alienation of government power and has become a channel for certain government-affiliated institutions, enterprises and even some private enterprises to trade money. Clearing these charges is very important for regulating government behavior, rationalizing basic distribution relations, and restricting government power. Important significance." Zhang Bin, Institute of Finance and Economics, Chinese Academy of Social Sciences, told the Economic Information Daily.

In addition, the meeting called for the abolition of government funds that are not obvious in terms of policy effects and that are not suitable for the development of the market economy, and the integration of repetitive fee-based funds. If the government fund charges exceed the service cost, and there is a large balance of income and expenditure, the levy standard should be lowered. Zhang Bin told reporters that the standard of government funds and the funds needed for expenditure are often disconnected. Expenditure will change, but the fee standard will remain the same for many years, and a large amount of balance may be generated. "So if the government funds can't spend, don't charge so much, you should lower the fees," he said.

Reduced electricity prices, industrial and commercial reduction costs exceed 80 billion yuan

At the same time as the implementation of structural tax cuts and universal fee reductions, starting from the price of electricity, the “three-pronged approach” is also an important policy “prescription” for steady growth and restructuring.

The meeting decided to appropriately cut the on-grid price of coal-fired power generation and the price of industrial and commercial electricity. First, in accordance with the coal-electricity price linkage mechanism, the average on-grid price of coal-fired power generation in the country is reduced by about 2 cents per kWh. Second, the implementation of commercial electricity and industrial electricity at the same price, the national industrial and commercial electricity prices on average per kWh of about 1.8 cents, to reduce the burden of corporate electricity. Continue to adopt differential electricity prices for high-energy-consuming industries, and clarify catalogues and increase enforcement of punitive electricity prices. The third is to use the price reduction space to properly guide the natural gas power generation price and the prominent structural contradictions of environmental protection electricity prices such as denitrification, dust removal and ultra-low emission, and promote energy conservation and emission reduction and air pollution prevention and control.

It is understood that on December 25, 2012, the State Council officially issued the "Guiding Opinions on Deepening the Reform of Thermal Coal Marketization", proposing that when the price fluctuation of thermal coal exceeds 5%, the annual electricity price will be adjusted accordingly. Since October 2013 and September 2014, the on-grid tariff has been lowered twice, but the sales price has not been adjusted.

"The first two down-grid tariffs were mainly for the purpose of supplementing environmental protection electricity prices, renewable energy funds, etc., and this power cut price not only conforms to the coal-electricity linkage policy, but also directly reduces the cost of enterprises and achieves steady growth. The purpose, and specific policies for high-energy-consuming enterprises and clean energy power generation, promoted structural adjustment, can be said to be a three-pronged approach." Ouyang Changyu said that the industry will account for a relatively large proportion of electricity costs to production costs will be more obvious, such as The electricity production cost of the electrolytic aluminum industry accounts for about 40% of the total cost. “The production of one ton of aluminum requires 13,000 kWh, and the electricity price is lowered by 1.8 cents, and the cost can be reduced by 234 yuan.”

According to the National Energy Administration, the electricity consumption of the secondary industry in 2014 was 406.5 billion kWh, of which industrial electricity consumption was 399.30 billion kWh, while the tertiary industry used 666 billion kWh, most of which were commercial. Electricity price. The average industrial and commercial electricity price is reduced by about 1.8 cents per kWh. Only industrial users can directly reduce the cost by 71.874 billion yuan, and the cumulative cost of industrial and commercial buildings has shrunk by more than 80 billion yuan.

Tax reduction rate iron ore resource tax reduction

In order to improve the production and operation environment of iron ore enterprises, promote structural adjustment, support the coordinated development and upgrading of upstream and downstream industries, and ensure the security of national resource supply, the meeting decided that since May 1, the proportion of iron ore resource tax collection will be appropriately reduced according to law. Less than 40% of the prescribed tax amount. This is undoubtedly a big plus for domestic iron ore companies.

According to industry insiders, Chinese iron ore enterprises have higher mining costs and lower grades than foreign companies. Domestic enterprises are relatively weaker than international iron ore companies. At present, the prices of bulk energy products in the international market continue to fall, and the prices of iron ore imported from South America and Australia are falling. With China's economic slowdown and global iron ore prices falling sharply, domestic iron ore enterprises are generally in a state of loss, and it is difficult to compete with low-cost imported iron ore.

Zhang Bin said that the overall price of iron ore is currently sluggish. Under the background of foreign iron ore, domestic enterprises are burdened and their losses are relatively serious. The iron ore resource tax is reduced and the intensity is very strong, which can at least save a lot of cash flow for domestic iron ore enterprises.

"In the case of the current loss of enterprises, if the domestic resource tax is not reduced, the cost of the enterprise is high, and the price is not competitive." Wang Zecai told reporters that "this is not conducive to enterprises to enhance competitiveness, which is not conducive to enterprises going out, not Therefore, lowering the resource tax rate can greatly reduce the cost of enterprises, enhance competitiveness, support structural adjustment and industrial upgrading, maintain national energy security, and inject a fresh breath to maintain the rapid recovery of the real economy. Agent."

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