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Hefei company benefiting from local government's measures

By ZHANG YUE and ZHU LIXIN | China Daily | Updated: 2022-03-02 08:47
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Industrial experts said that while there are many ways to alleviate the difficulties facing businesses, financial support as well as tax and fee cuts have always been the most direct and effective means, particularly for those involved in the industrial economy and, more specifically, in the manufacturing sector.

Wei Qijia, a researcher at Economic Forecasting Department at the State Information Center, said tax and fee cuts usually directly improve investors' market sentiment toward small businesses. More importantly, such cuts help maintain the liquidity flow of medium-sized, small and micro businesses, allowing them to funnel more cash into production.

Over the past five years, the central government has been working on a variety of tax breaks for small businesses, and some are already feeling the gains.

Li Xinli, president of Anhui province-based Hefei HRGLY Intelligent Equipment, which produces intelligent packing equipment for pharmaceutical factories, said that his company's market share and scale has increased since 2017.

Its growth can largely be attributed to conducive policies, particularly to well-calibrated tax breaks and financing from the Hefei government.

The company relocated its headquarters from Shanghai to the Hefei Economic and Technological Development Zone in 2017, and has since grown in size from around 40 employees to 210.

"We've greatly benefited from the local government's policies to reduce taxes and fees, which helped attract talent and fostered connections between banks and enterprises," Li said. "Last year, the tax deferral payment policies targeting manufacturers helped solve the acute liquidity pressure we were facing at that moment."

Li also lauded the financing his company has received thanks to Hefei government's policies.

"The local government has been encouraging financial institutions to offer more loans to high-tech and manufacturing businesses. As both a high-tech company and a manufacturer, we have experienced pressure securing loans," he said. "Since the government has decided to pay half the interest, loans have become more accessible and affordable. All these measures have contributed greatly to our expansion in recent years."

Still, Li admits, recruiting talent remains an issue, as the number of people willing to work in manufacturing is declining.

Wei, the researcher from the State Information Center, confirmed that in recent years, the manufacturing sector has been grappling with a significant loss of technical talent, further exacerbating labor shortage problems.

"The key to invigorating the industrial economy and promoting high-quality development is to concentrate on key issues facing China's domestic industrial growth," he said. "It is important to firmly grasp the characteristics of current industrial development to truly promote the steady improvement of the sector."

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