Government subsidies for generous LED industry suffer from financial subsidy dependence

In recent years, in order to promote the development of LED as an emerging industry, the national policy has given great financial support to enterprises. Thousands of companies have invested in the LED industry one after another, many of them in order to get a share of state subsidies, and enjoy a variety of preferential policies such as tax breaks and cheap industrial land.

At present, China's LED market share in the lighting market is less than 5%, but the country's promotion is unprecedented. "In the early days, the cost of LED was high. Without the government's financial subsidies and support, it is difficult to open the market in a short period of time." A domestic LED manufacturer official told reporters.

Policy subsidies give birth to bubbles

According to China's "12th Five-Year Plan for Semiconductor Lighting Technology Development", by 2015, China's LED lighting industry will reach 500 billion yuan, LED lighting products account for 30% of general lighting; focus on cultivating 20 to 30 The leading enterprises will build 20 national-level industrial bases and 50 “Ten Cities and Ten Thousand Cities” pilot demonstration cities to promote China's semiconductor lighting industry into the top three in the world.

At present, LED has just entered the indoor lighting industry, and will be a large-scale application period of LED commercial lighting in the next three to five years, and will be fully popularized in home lighting in five to ten years.

At the beginning of the LED industry, it may be necessary for the tangible hand to conduct certain guidance and support. However, the strength of support and the excessive subsidies have caused experts to question.

Local governments have generously subsidized various subsidies for LED companies, and some have even reached alarming levels. It is not uncommon to see billions and tens of billions. For example, every time an enterprise purchases a MOCVD equipment, it can receive subsidies ranging from 8 million yuan to 12 million yuan, and some subsidies even exceed 50% of the equipment price. In 2012, the amount of subsidies for LED lighting was about 4 million, and the subsidy amount was about 200 million yuan. This year, the scale of subsidies will be expanded to more than 10 million, and the scope of subsidies will be extended to tunnel lights, bulbs, and street lamps.

Since the beginning of this year, various support subsidy policies have emerged in various places: In January, the Ministry of Finance issued the “Notice on Adjusting and Promulgating the 13th Government Procurement List of Energy-Saving Products”, and the adjusted procurement list added lighting products for the first time. 84 company's LED street light / tunnel light, LED down light, reflective ballast LED light three products; in February, the National Development and Reform Commission and other six ministries jointly issued the "semiconductor lighting energy-saving industrial planning"; in April, "Jiangxi Province energy-saving emission reduction The “Twelfth Five-Year Plan” requires all public institutions to use high-efficiency lighting fixtures in 2015; in May, Fujian Province issued “Several Measures for Promoting the Application of LED Lighting Products in Fujian Province”, which clearly defines the field of public lighting by the end of 2015. LED lighting products are widely used, and the province achieves more than 50% energy saving.

The reporter learned that under the support of local governments at all levels, LED industry parks have sprung up. In recent years, the average annual growth rate of the LED industry has exceeded 20%. At present, China's LED industry has formed an industrial pattern of four major regions (Pearl River Delta, Yangtze River Delta, Fujian Jiangxi, Northern Region) and seven bases (Dalian, Shanghai, Shenzhen, Nanchang, Xiamen, Yangzhou, Shijiazhuang).

However, behind the prosperous, the negative effects of over-supporting policies such as rushing over, overheated investment, and overcapacity began to emerge. There are 4,000 to 5,000 LED companies in Guangzhou alone, and there are more than 8,000 LED companies across the country. A large amount of hot money has poured in, making the entire industry unprecedentedly prosperous, but it also hides excess risks, and the industry is reshuffled.

“Overcapacity has become the soft underbelly of the LED industry. The LED investment planning and projects under construction in the past two years have far exceeded the actual needs of the market.” He Zaihua, a senior researcher at China Investment Consulting, told reporters that the current LED industry is highlighting In the “structural overcapacity” pattern, there is a serious overcapacity in downstream applications, sub-packaging, and supporting industries. In the middle and upper reaches of the chip and epitaxy, there are overcapacity of low-performance products, serious shortage of high-performance products, and heavy imports.

According to statistics from the High-tech LED Industry Research Institute, there were more than 80 LED lighting companies in Shenzhen in 2012; nearly 10% of lighting companies in Foshan have closed down; and LED lighting companies in Dongguan and Zhongshan are also in deep recession. A number of domestic large-scale LED manufacturers told reporters that at least half of the LED light box companies and LED light bar manufacturers have closed down in the second half of this year.

"So many corporate failures should cause reflection." Zhang Hongbiao, research director of the High-tech LED Industry Research Institute, believes that "the financial subsidy policies introduced by various localities should be responsible for a large part of the domestic LED industry's enthusiasm in recent years."

Policy support should be moderate

Support and subsidies are the important support of the country for a sunrise industry, but it has caused various criticisms of “government subsidies and seedlings” in the LED industry. Is government support in the end, is it a booster or a positive energy? Is the supported enterprise catching the policy or the money?

Undoubtedly, for certain emerging industries at the beginning, it may be necessary for the visible hand to provide certain guidance and support. The introduction of a series of favorable policies in the country in recent years is of great significance to the launch of the domestic LED lighting market. "As a strategic emerging industry, there is still a certain gap between LED and mature industries. In order to gradually cultivate this market, the government needs strong subsidy policies to stimulate," said Li Mantie, chairman of Lehman Optoelectronics.

Enterprises have more natural expectations for subsidies. However, many companies are blindly launched to enjoy a piece of state subsidies and enjoy various preferential policies such as tax breaks and cheap industrial land. “The country’s huge subsidies have increased the impulse of some enterprises to invest, and the terminal’s consumption subsidies eventually evolved into direct subsidies to production companies.” An industry insider who asked not to be named said that as long as there is government support, companies look at profit margins. Yes, it will swarm, and then cause overcapacity, and finally can only end in price war.

It is understood that the National Development and Reform Commission has adopted an indirect subsidy for the subsidy policy for LED-entered enterprises. The financial subsidy will be given to the winning bidders, and then the winning bidder will sell the products to the end users at the price of the bid-winning agreement minus the financial subsidy funds. End users get the most out of their benefits. In the face of this unprecedented product promotion opportunity, many lighting companies have participated in the bidding. The winning bidders can receive government financial subsidies to sell LED lighting products at low prices, and most LED companies are “losing”.

Therefore, industry insiders analyze that such subsidy policies may not allow those who pay attention to technology and products to have better technical content. Experts stressed that the financial subsidies for LED lighting must be “open, fair and just” in terms of operation methods. If you leave the “three public principles”, it is inevitable that there will be black-box operations and partial suspicions.

Subsidy policies cannot be the power to dominate the industry. The cultivation and development of the industry depends mainly on the power of the market and technology, rather than relying on government planning and support to generate and grow. Experts pointed out that as the government, the biggest contribution to the economy and society is not to directly participate in the formulation of industrial planning, nor to directly provide various material concessions and support, the focus is on providing excellent markets for entrepreneurs and workers. The business environment allows them to start and compete fairly.

"For the healthy development of the LED industry, the government's policy support and application promotion, enterprise technology innovation, industry standard setting, one can not be less." Industry insiders said. The blind development of quick success and instant benefit will only lead to insufficient competitiveness, and it will not be able to escape the fate of being eliminated in the market. The huge amount of state financial subsidies has not only made these enterprises that have grown up in the greenhouse "new", but has become a catalyst for their "dead". At the same time, it is difficult for the state finances to afford enterprises that are becoming more and more large and have no benefits as long as they are subsidized

The industry believes that neither the enterprise nor the local government can use subsidies as the only means. Because companies and products that can receive subsidies only account for a small part, to occupy the market depends on technological innovation, brand and channel construction.

( This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED . Readers need to verify the relevant content by themselves. )

Hose Reel is a cylindrical spindle made of either metal, fiberglass, or plastic and is used for storing a hose. The most common styles of hose reels are spring driven (which is self retracting), hand crank, or motor driven. Hose reels are categorized by the diameter and length of the hose they hold, the pressure rating and the rewind method. Hose reels can either be fixed in a permanent location, or portable and attached to a truck, trailer, or cart.

 Automatic hose reels for diesel and oil have been designed to ensure highefficiency.

 The sturdy structure can guarantee best performance also in heavy duty  conditions.

 Thanks to its high volume design, this retractable diesel fuel hose reel is capable of dealing with environments where a longer length hose is required

Hose Reel

Hose Reel,Air Hose Reel,Water Hose Reel,Oil Hose Reel