Mr. Fang, who is in his early forties this year, was one of the first white-collar workers to enter a foreign company, and almost witnessed the whole development history of foreign capital entering China. Although Mr. Fang's current annual salary is high and his life is very comfortable, his heart is always heavy in the face of this enviable job. He said with emotion, "I have helped foreign bosses earn too much money from China people. I feel that my hands are sour after earning this money, but my heart is getting more and more greedy. At this rate, I am afraid that China will be hollowed out by them! " This sounds alarmist, but it is the common aspiration of many people in the industry. Mr. Fang has worked with the bosses of multinational companies for many years, and he knows the inside story of false losses, tax avoidance and profit transfer of foreign-funded enterprises like the back of his hand.
Profit transfer:
Ming Xiu plank road secretly crossed Chencang.
"A pig and a hen jointly opened a restaurant. Chickens pay with their own eggs and pigs pay with their own meat-can the joint venture continue after cutting the pork? "
Mr. Fang is a student in the Department of Economics and Management of a key university. After graduation, he was assigned to work in a state-owned enterprise with good welfare. After just working for two years, he met a rare opportunity-a well-known multinational company in the industry came to China to discuss cooperation matters. Mr. Fang is fluent in English and has become the backbone of the negotiation. "At that time, the' joint venture' was just a piece of meat that could be thrown up," Mr. Fang recalled. "The competition between several domestic counterparts is extremely fierce. Now that I think about it, it is a struggle between the snipe and the clam, and the fisherman benefits. " Finally, while winning, Mr. Fang's unit can't wait to accept the suggestions of foreign investors, divest its superior assets and form a joint venture company.
Because of Mr. Fang's outstanding performance in the negotiations and his trust in the future development prospects of the joint venture company, he finally resigned from his job in the state-owned enterprise and accepted a middle-level position in charge of procurement in the joint venture company. I thought that the leaders of 5 1% enterprises controlled by China should be from China. But in practice, Mr. Fang found that because foreign capital provided "advanced management experience" and "advanced production technology", he mastered the decision-making direction of most practical problems. In particular, foreign investors rely on technical control to control the purchasing power of raw materials and parts in actual operation.
At first, Mr. Fang, in the belief of doing something, carefully checked every component supplier who submitted the intention of cooperation, and finally locked in a private enterprise in the south. Technical clearance, specifications meet the standards. The most important thing is low price. After the application report was submitted to the superior supervisor, it was rejected on the grounds that "the factory must submit the products to the parent company for certification".
When Mr. Fang conveyed the conclusion to the bidder and politely asked the other party for certification, the other party was anxious: "The main supply direction of our spare parts products is Sino-foreign joint ventures in the industry. In order to get the right of parts matching, we have negotiated abroad many times, which not only cost a lot of travel expenses, but also cost millions of technology transfer fees. Our products have passed the international certification to ensure the quality. Why should I resubmit the certification? These expenses are all production costs! " After accounting, if the certification fee will increase the production cost by about 20%, the bidder will reluctantly agree to the certification after repeated calculations, and the foreign party will throw out a new reason: "The certification standard will not be supplied to non-supporting manufacturers." Mr. Fang suddenly realized that the foreign party did not agree to purchase spare parts and raw materials in China at all, and the fundamental purpose was to convey profits to its foreign parent company through the so-called "original factory supply system". The profits of the joint venture must be shared with the Chinese side, but the huge profits brought by high-priced procurement to foreign subordinate parts manufacturers directly controlled by the parent company can be enjoyed by them alone.
"A pig and a hen jointly opened a restaurant. Chickens pay with their own eggs and pigs pay with their own meat-can the joint venture continue after cutting the pork? " The helpless Mr. Fang learned the fundamental intention of the foreign party, and the work at hand was much simpler. Although the procurement cost of spare parts has increased by nearly 60%, the good sales situation has brought good benefits to the joint venture company, because it is under the banner of "internationally renowned brand". However, with the upgrading of industry competition, profits gradually leveled off, and the disadvantage of high cost began to appear. After repeated representations by the Chinese side, the foreign party finally agreed to "localize procurement" of parts and raw materials with low technical requirements. However, Mr. Fang still noticed in the actual procurement that the original foreign parts supplier was actually replaced by a "joint venture manufacturer" that was inextricably linked with the parent company.
analyse
Internationally, first-class enterprises earn money by certification, while second-rate enterprises earn money by brands. Take automobile manufacturing enterprises as an example, foreign investors intend to set up wholly-owned parts enterprises in their own countries and Sino-foreign joint venture vehicle companies in China. Part of the money earned by Sino-foreign joint ventures should be distributed to the Chinese side, but all the profits earned by wholly foreign-owned parts companies established by foreign investors in their own countries are foreign. China spare parts enterprises must pass the "certification" of foreign headquarters before they can supply supporting products to Sino-foreign joint venture host enterprises and vehicle manufacturers. In this way, "benefit transfer" is realized. "Authentication" is only a means, and interest transfer is the essence.
Judging from the economic performance in the first half of the year announced by the National Development and Reform Commission, the profit of the automobile industry, which has been listed as one of the profiteering industries, decreased by 48.8% year-on-year. According to the data from China Automobile Industry Consulting and Development Company, in the first half of the year, China accumulated 1.85 1.70 million vehicles, up about 3.28% year-on-year, and its sales volume 1.843 million vehicles, up/.55% year-on-year. Production and sales have increased, but profits have decreased. Not only in the automobile industry, but also in many industries, there has been a "strange thing" in which the profits of foreign-funded enterprises have declined year by year. According to people familiar with the matter, it is not that the benefits of foreign companies are getting worse and worse, but that profits are transferred by "moving away".
The profit transfer of foreign-funded enterprises occurs in the process of purchasing, and its premise is that the foreign party adheres to the principle of "original supply". In Sino-foreign joint venture host enterprises and automobile enterprises, the foreign party has mastered the power to purchase raw materials and parts by virtue of technical control. In recent years, Chinese-foreign joint ventures and wholly foreign-owned enterprises generally adhere to the "original factory supply principle" when purchasing raw materials and parts, excluding Chinese-funded enterprises.
Purchasing raw materials and spare parts from the parent company at a high price is another magic weapon for foreign companies to "steal the column". A Japanese auto parts company purchases raw materials from its parent company, and the purchase price is dozens of times higher than that of similar domestic raw materials. Authorities told reporters that foreign investors buy raw materials and spare parts from the parent company at a high price, and then sell the products to the parent company at a low price, thus transferring profits to the parent company, increasing the cost of Sino-foreign joint ventures and reducing the profits of Sino-foreign joint ventures.
In addition, the foreign side also collects high technology transfer fees from the Chinese side through "certification" and other means to achieve the purpose of transferring profits. The technical departments of Sino-foreign joint venture host enterprises are all controlled by foreign parties. Therefore, even in the Sino-foreign joint-venture host enterprises controlled by China, China has almost no say in product matching. China spare parts enterprises that provide accessories for Sino-foreign joint venture host enterprises must be certified by the foreign parent company. In this way, "benefit transfer" is realized. "Authentication" is only a means, and interest transfer is the essence.
Avoid losses:
The paradox of foreign investment is surprising.
Multinational companies have their own team of lawyers to study how to drill a small gap in the law into a big one. Our legal loopholes are as big as doors, and people walk past with the sign of "reasonable tax avoidance" in their hands.
With the influx of foreign-funded enterprises and the low price advantage of domestic counterparts, the growth rate of Mr. Fang's company has declined, and the tax payment of 200/kloc-0 has dropped from 60 million to 40 million. At this time, on the grounds of "relying on foreign advanced management methods to promote the rapid development of enterprises and create more tax revenue for China", the foreign side proposed to set up a wholly-owned enterprise. Mr. Fang, who has been promoted to the top of the company, was appointed by the foreign boss to coordinate this matter.
Mr. Fang sighed and told reporters that the so-called "coordination work" at that time was not difficult. The local government heard that wholly foreign-owned factories can create more profits and pay more taxes, and almost agreed to all the requirements of foreign businessmen without hesitation, and actively provided preferential conditions for wholly foreign-owned factories. Under the pressure of government departments, China had to sell shares to foreign parties at a very low price, and soon foreign parties set up a wholly-owned company as they wished, and Mr. Fang also entered the new company as a company veteran.
But the only thing that didn't happen was the local government. Foreign investors pay 30 million yuan in the first year of "sole proprietorship", which is more than 6.5438+million yuan less than the joint venture before "sole proprietorship"; The tax payment in the second year is 20 million yuan, which is 6.5438 million yuan less than that in the first year of "sole proprietorship"; In the third year, the tax payment of foreign "sole proprietorship" is still nearly half less than that of the second year. Is the competition getting fiercer, or is the market getting worse? Mr Fang said: As we all know, the market situation in China has been getting better and better in recent years. In fact, after "sole proprietorship", under standardized management, the situation of enterprises is getting better and better. As far as he knows, the market share of product sales of this foreign-funded enterprise has been steadily rising, and the excellent performance of China District has also attracted the attention of the parent company. At the end of 2004, the company's board of directors decided to make the third additional investment.
In that case, why has this enterprise been losing money on its books? Facing the reporter's question, Mr. Fang shook his head. Because of the different division of labor, he is not very clear about the situation of tax declaration. However, Mr. Fang definitely told reporters that because in many places, the amount of foreign capital introduced and the corresponding GDP growth are the main indicators of leading cadres, multinational companies like Mr. Fang's foreign companies can often bargain with local governments under the trump card of "currency ticket" and get tax benefits unimaginable to ordinary domestic counterparts. In addition to preferential measures such as tax relief, financial return and low land price, some local leaders even intervened in the tax inspection work of tax authorities for the growth of local economic indicators and faster promotion. This is an important reason why many foreign companies dare to "invest more thanks".
On the other hand, these multinational companies have strong tax planning capabilities. An official in State Taxation Administration of The People's Republic of China once revealed that most well-known multinational companies will choose internationally renowned accounting companies such as PricewaterhouseCoopers to handle it. Their operation method is very complicated, and they often have to turn around several times abroad. Moreover, internal financial accounting has very advanced software systems, and some software systems are not operated by domestic tax personnel at all, which is extremely difficult to supervise. In addition, the information blockade between customs, taxation and other government departments has also increased the difficulty of tax investigation. Mr. Fang made a half-joking analogy: "Multinational companies have a team of lawyers who specialize in law. As long as there is a gap, they can drill a hole. Our current legal loopholes are almost bigger than the door, and we can go out in an upright manner. "
analyse
Statistics show that the average loss of foreign enterprises in China is 5 1%-55%, and the annual loss exceeds120 billion yuan. According to the data of the National Bureau of Statistics, the profits (107.5 billion yuan) of foreign-invested enterprises and enterprises from Hong Kong, Macao and Taiwan decreased by 3.5% from June to April this year. In this regard, IRS officials believe that two-thirds of loss-making enterprises belong to non-operating reasons and are intended to avoid taxes. It is conservatively estimated that the tax revenue lost by foreign-funded enterprises in China has reached 30 billion yuan a year.
At present, China has become the country that attracts the most foreign direct investment in the world. However, a large number of foreign-funded enterprises flood into China every year, but generally there are many losses. Some people call this phenomenon "the paradox of foreign investment": firstly, the loss rate of multinational companies that can extend the capital operation means to other countries and decompose the value chain creation process to other countries is higher than that of local enterprises in the host country. The second is the pursuit of profit by capital. With such a high loss rate, there is still a large amount of foreign capital pouring into these hot spots. How did such an amazing "paradox of foreign investment" come into being, and what secrets are hidden in it?
Qingdao is an important city in China to attract foreign investment. In the first half of 2004, 479 foreign-funded enterprises above designated size suffered losses, accounting for 60% of the total losses of enterprises above designated size in Qingdao. The loss was 830 million yuan, accounting for 68% of the losses of enterprises above designated size in Qingdao.
Not only in Qingdao, Yangtze River Delta, Pearl River Delta and Bohai Rim, large-scale losses of foreign-funded enterprises are common. The purpose of book losses of foreign-funded enterprises is to avoid taxes. At present, there are six main forms of tax avoidance for foreign companies: buying and selling both ends, transferring profits abroad through "AG low salary"; Unrealistically increase the value of fixed assets and equipment, recover part of the investment in advance, falsely report the annual depreciation expense of the enterprise, and delay the enterprise from entering the profit-making year; Remit profits abroad in the form of paying royalties, sales commissions and kickbacks such as patents, proprietary technologies, trademarks and goodwill; Within the group, multi-link extraction and payment of patent fees are implemented for upstream, middle and downstream products; Pay labor costs such as network maintenance, advertising and consulting to transfer profits; Take advantage of the weakening of capital, and transfer corporate profits by providing loans to affiliated enterprises to pay interest or not.
Such large-scale tax avoidance by foreign-funded enterprises also reflects the weak supervision of foreign enterprises in China. It has been estimated that with the existing manpower, material resources and technical means in China, the average probability of each existing foreign-funded enterprise being audited is once in 800 years! Although the authenticity of the figures is debatable, it also illustrates the lack of anti-tax avoidance in China's tax inspection departments from one side.
Invite external investment
Local enterprises: lack of right to speak in differential treatment
"China people are experts in the civil war and amateurs in foreign wars. When some officials see foreigners, they can't wait to kneel down and call them' foreigners'. Without policy support, China enterprises will never have a real voice in the international market. "
For China people who work in foreign companies like Mr. Fang, especially those who have been promoted to senior managers, their heads are like ceilings with a piece of glass hanging on them, and they will never get into the core. The real supervisor will always be a foreigner who parachuted in, or a China banana who is "yellow outside and white inside". In addition to the generous salary, these people will have quite a lot of home leave every year, and the high entry and exit tolls will also be fully reimbursed by the company. The psychology of "foreigners making money in China" has been haunting Mr. Fang, but Mr. Fang, who has accumulated certain customer resources and received good management training, has never left a foreign company to start his own business, but it is because he saw the lesson of a colleague in that year.
Xiao Liu and Mr. Fang experienced the transformation of that company from Sino-foreign joint venture to wholly foreign-owned. The only difference is that Xiao Liu is a professional technician. After mastering certain resources, he chose to start his own business. At first, Xiao Liu's factory operated well. Because of the high-tech high-end production line, some fierce low-end competition has been avoided, and product sales have soared. However, with the continuous injection of foreign capital, many foreign companies began to carry out large-scale and supporting production. At the bidding meeting, Liu Fa's products are always defeated by some new joint ventures. However, due to the repeated certification of some core technologies and rising transfer costs, the profits of its products have been continuously leveled. What is even more frightening is that, in many cases, these private enterprises that are not technically dominant have to face more unequal treatment.
Take taxation as an example. Needless to say, because foreign companies can enjoy various tax incentives according to national policies, in practice, the probability of private enterprises being spot-checked will be dozens or even hundreds of times that of foreign companies, and many private enterprise managers will tremble when they hear the word tax. According to Xiao Liu, in a tax inspection, because there were some fake tax invoices in the market at that time, the enterprises that received the invoices had to face the situation of paying taxes. Due to the shortage of funds at the end of the year, Xiao Liu had to mortgage his house into cash to avoid going to jail. Faced with the same problem, managers of foreign companies will have more time to deal with it.
analyse
In fact, the elimination of enterprises in China is "in progress" rather than "future tense", and even close to "completion time" in some industries. Look at our mobile phone market. So far, foreign manufacturers have earned more than $654.38+000 billion by selling chips, while TCL, the best mobile phone manufacturer in China, only earns 600-700 million a year. The market share of the second generation mobile communication base station is as high as 400 billion RMB, of which the share provided by China enterprises according to folk algorithms is only 2.4%, and the data of the Ministry of Information Industry is 6%. There is no order of magnitude difference between these two figures. In fact, more than 400 billion have been taken away by foreign companies.
After China's entry into WTO, some economists put forward the concept that China will become a "world manufacturing center". At present, international manufacturing capital has been transferred to China on a large scale. However, among the products that have occupied the market advantage at home and abroad, they mainly focus on the production of non-core components and product assembly. Therefore, China can only be regarded as a manufacturing power, not a manufacturing power.
Undeniably, there are not many enterprises in China that can own independent intellectual property rights. In the whole manufacturing industry chain, most enterprises in China are still in the downstream, and the conditions for their own growth are very fragile. Wei Xin, chairman of Founder Group, pointed out that China's practice of "exchanging market for technology" in the past proved to be a failure. The market was taken away, but it was not technology in exchange. Only by mastering the core technology in industrial development can domestic enterprises occupy a dominant position in international economic competition, control the division of labor and profit distribution in the industrial chain, have greater autonomy to decide the timetable for product launch and elimination, and obtain excess profits higher than the industry average.
When a certain technology is updated, domestic enterprises will have the opportunity to own independent core technologies. When this opportunity arises, the government should make great determination to adjust its industrial policy and protect local industries as much as possible. For industries in China that have achieved manufacturing scale advantages and formed supporting product layout, such as electronic products, domestic enterprises should not only purchase foreign technologies, but also choose some key technologies to make breakthroughs and establish an industrial chain led by China enterprises. At the same time, the relevant state departments should make full use of the policy protection measures provided at the initial stage of China's accession to the WTO, give appropriate support to areas that may form major breakthroughs from industrial policies, tax policies, and state procurement, and help these enterprises turn their manufacturing advantages into technological advantages. (ZT)
-
The fire ran underground and rushed; Once the lava is ejected, it will burn all the weeds and trees, so it will not rot.