Foreign Companies May Not Be Keen On The Negative Effects Of Concessions.

In developed markets, some countries have hardly produced toys.

TV,

Household appliances such as household appliances, and these products were first invented by them. The production of these products has gradually shifted to sub developed countries or developing countries.

The law of industrial pfer will lead to more product upgrading and pfer to China. The merger of two taxes will increase the enthusiasm of domestic enterprises to participate in competition.

Facing the increasingly fierce competition in China, international enterprises must improve their technological level of participating in domestic competitive products, and the "technology spillover" in fierce competition will accelerate the reduction of the gap between domestic and foreign enterprises in the high-end products.

The merger of two taxes will not hinder the acceleration of foreign capital's entry into China. China's rapid economic development and continuous opening up itself have great attraction for foreign investment, which is better than all preferential policies that we give to foreign investment.

The merger of income tax between domestic and foreign enterprises is an inevitable trend. Domestic enterprises have been paying attention to this aspect for a long time. However, tax preferences are not the primary factor to attract foreign investment.

Why do companies want to go abroad to produce rather than stay at home and continue to grow and expand? Look at China's motorcycle industry: motorcycle industry has begun to decline in China, but it has been popular in Vietnam, and soon squeezed out Japanese enterprises and accounted for at least 70% of the market share.

Vietnam's preferential tax rate for foreign investment is generally 25%, while the Chinese corporate income tax rate is 33%. In fact, the average tax burden of general domestic enterprises is 22%, and the tax burden of some motorcycle companies is not so high.

China's domestic tax is more favorable. Why do companies prefer to go?

Running a factory?

Meng Lei admitted to reporters that it is because the pfer of industry has its own laws. When a developed industry has developed to a certain stage in the developed market, the law of scale economy and life cycle leads to the pfer of the industry from developed market to sub developed market. This is the law of international industrial pfer, and it is not changed by preferential policies.

"Industrial pfer may be only one aspect, and the global production layout of multinational enterprises is also a factor. For large multinational enterprises, it can split the production line into many links and organize production in countries and regions with the lowest production cost in the world."

China's skilled labor costs are low and its market demand is bright. So many famous international automobile companies have put the assembly link in China, and the automobile has overcapacity in the developed market.

In the post industrial market, especially the industrial production has entered the stage of standardization, the developed market has already been difficult to compete with the industrialized countries.

When Chinese made products flow to the world market to the tide, although we are faced with various anti-dumping sanctions at present, all these are all helpless and useless for the developed market enterprises.

The industry in the developed market has already started to decline. Just like China's motorcycles, it can only be pferred to a less developed country. Tax incentives are not important.

What foreign companies attach more importance to is China's potential market, cheap labor force, stable political situation, fast growing economy, resource endowment and comparative advantage in China.

In the past, many preferential policies were formulated to attract foreign investment.

These foreign preferential policies do play a great role in promoting domestic economic development. However, these policies have become obstacles to the equal competition of domestic enterprises.

At present, the income tax rate of foreign-funded enterprises in China is 15%, while domestic enterprises are 33%. If China's income tax rate, tax relief and tax refund are applied in three aspects, the foreign enterprises shall implement regional preferential tax policies with different levels and priorities, so that the actual burden borne by foreign-funded enterprises will only account for 8%-9% of enterprise income, while the average tax burden of domestic general domestic enterprises will reach 22%, and the tax burden of enterprises in large China will be as high as 30%.

The gap of tax burden makes domestic enterprises weak in competition. It hinders the development of domestic enterprises in international competition.

The purpose of domestic preferential policies for foreign investment is to attract foreign capital to pfer technology, so domestic enterprises can reduce the gap with developed markets.

In fact, the technology pferred by foreign capital to domestic enterprises is by no means their core technology, and the Chinese market is only an auxiliary production link of their value chain.

The technology pfer of foreign enterprises to host countries depends entirely on the degree of control of foreign investment in joint ventures. If foreign enterprises do not occupy a dominant position in joint ventures, they will not normally pfer their core technologies.

For example, although multinational corporations have joint ventures with domestic automobile companies, the core engine technology has not been pferred to us.

Therefore, even if there is a concept of foreign capital, the competitiveness of foreign capital products, the pfer of foreign capital technology and management will be very different.