research conclusion
Financial subsidies play a positive role in guiding and leveraging the development of industry, but long-term high subsidies to industry often encourage enterprises to rely on subsidies. Since 2019, photovoltaic, new energy vehicles, wind power and other industries have faced a decline in subsidies, but the development of the industry has not stopped. Looking forward to 2022, it has become a broad consensus that the government attaches importance to infrastructure and affordable housing. Under this background, is it possible for industry subsidies to change? How will financial subsidies develop in the future? This paper discusses this.
The strength of subsidies is closely related to the strength of general public fiscal deficit. Since 2008, China's fiscal policy has been generally positive, and the average amount of subsidies (total amount of subsidies in that year / total number of A-share companies in that year) has been rising, but there are also fluctuations. For example, China's actual deficit ratio decreased in 2017, and the corresponding average amount of subsidies decreased.
The industrial subsidy policy is more biased towards high-tech industries. By examining the absolute scale of subsidies, we can see that the average annual subsidy amount of traditional industries such as steel, mining and household appliances ranks high, and the average annual subsidy amount of computers and communications is less than one quarter of that of steel. However, if the factor of enterprise scale is excluded and the relative scale of subsidies in different industries is calculated by subsidy amount / asset scale, the traditional industries are generally backward.
National strategic emerging industry subsidies are more resilient in the year of fiscal marginal contraction. Taking 2017 as a sample and subtracting the subsidy growth rate of each industry from the overall subsidy growth rate, we can find that high toughness industries (the growth rate is more than 3 percentage points higher than the overall) have a high degree of coincidence with the national strategic emerging industries during the 13th five year plan (according to the notice of the State Council on printing and distributing the development plan of national strategic emerging industries during the 13th five year plan).
The sustainability of high subsidies in durable consumer goods manufacturing industry is the strongest, followed by energy, livelihood related and high technology. Combined with our series of definitions and calculations, judging from the average duration of high subsidies, the manufacturing of durable consumer goods has reached 7.5 years, far exceeding that of other industries; Energy, livelihood related and high technology are in the second echelon, and the average duration of high subsidies is about 2.7 years; The average duration of high subsidies in equipment manufacturing, service industry and non durable consumer goods manufacturing is less than or equal to two years, and the sustainability is weak.
Subsidies for high-tech and equipment manufacturing industries have declined to a lesser extent. We use the ratio of subsidies / assets after one year of decline to the previous year to measure the degree of decline of subsidies. In terms of categories, subsidies for high-tech and equipment manufacturing industries have the least decline, and can still maintain more than 75% after one year, of which semiconductor, communication equipment and special equipment are 86.6%, 83.8% and 77.3% respectively; Subsidies for traditional industries, durable consumer goods manufacturing and service industries have declined greatly, especially steel, chemical raw materials, white appliances, shipping and Internet media. After one year, the ratio is less than 65%.
The industry's dependence on subsidies may slow down the pace of subsidy reduction. We divide 21 industries into 9 categories according to their degree of decline and the subsidy dependence of corresponding primary industries. It is found that the industries with high subsidy dependence and slow decline speed account for a relatively large number.
The adjustment of subsidies will take into account the steady economic growth. In the context of regulatory constraints on real estate, The important task of stabilizing growth lies in fiscal and industrial policies: (1) as we judged in the annual outlook out of the fog, fiscal expenditure and deficit ratio are expected to remain at a high level next year, which will underpin industrial subsidies; (2) at the industry level, new energy vehicles and coal-fired power are the most important observation windows.
Risk statement
The contraction of general public finance is greater than expected;
The sample of A-share listed companies cannot represent all enterprises;
The subjects of government subsidies of A-share listed companies in different industries are not completely comparable.
