Dongguan Textile Enterprises Layoffs And New Labor Laws Help Pform Pearl River Delta

In the face of worsening investment environment in Guangdong's foreign-funded enterprises, a textile printing and dyeing company in Dongguan declared bankruptcy in February 29th and laid off nearly 3400 people.

Guangzhou Daily reported that Fu'an textile printing and dyeing company, located in the Changan industrial town, Changan Town, has more than 4000 employees. It suddenly collapsed yesterday, with a total of 3395 layoffs, and all the employees were to leave the factory on 7.

In recent years, due to the fierce competition in the international market, coupled with the changes in the investment environment and conditions in Guangdong, many local factories have said that they are facing difficulties.

Judging from the recent official actions, the PRD is seeking pformation and upgrading to the high end.

However, due to a variety of reasons, Dongguan's industrial pformation has a long way to go. Because of its high cost, many business owners are reluctant to pfer. It also calls for speeding up industrial restructuring with economic means, but completing the pformation may take ten years.

Before the successful pformation, they are undoubtedly faced with many difficulties. The factory manager pointed out that the company suffered huge losses from the second half of last year due to the deterioration of the international economic situation and the market downturn and so on. The production and operation of the company is very difficult, and it has been unable to afford the huge organizational structure and personnel expenses.

The company decided to close the printing and dyeing plant and related departments.

It is reported that the total amount of economic compensation the company plans to pay is 31 million yuan.

Nevertheless, most employees in the company think that the compensation standard is unreasonable.

2 billion yuan to withdraw from the Pearl River Delta 30 billion high-tech funds come in, the latest data show that the Pearl River Delta recently withdrew 2 billion yuan of funds, but at the same time 30 billion came in.

Most of the enterprises withdrawn are labor-intensive enterprises, and those who come in are high-tech and high-value enterprises.

Analysis shows what the consequences will be when the PRD enterprises move out, and how Guangdong will make up for hollowing is the focus of attention now. "2 billion yuan withdrawal and 30 billion hi tech funds come in" shows the impact of the pformation of the PRD business on Guangdong's economy, and also shows the intention of the government to focus on developing high-end technology industry in the future.

The labor law helped pform the Pearl River Delta, "new Express" reported. The CPPCC National Committee member and vice president of Guangdong University of Foreign Studies, Professor Gu Li Li, said that the newspaper said that factories in Dongguan, Shenzhen and Baoan were collectively divestment, and that more than 20 billion of funds were being lost to Vietnam and other places.

"These funds are invested in labor-intensive enterprises with low output value. Once the new law comes out, they will not be able to bear the high cost of labor."

Professor Gu said with great confidence, "but we hope these enterprises will move.

According to statistics, a number of enterprises are now coming in, with high technology and high production value. These funds are 30 billion.

This is industrial upgrading.

It can be said that this new law is helping the PRD to complete industrial upgrading.

As for the collapse of factories and divestment, will there be a high unemployment rate? Gu Li Li said, "there is still a 300 thousand gap in the labour force in Guangdong."

Zhu Zhengfu, vice chairman of the Guangdong provincial Lawyers Association, also believes that the new law's advantage is "it can promote our economic pformation and change our economic growth mode".

Gu also said that the purpose of the new law is to benefit ordinary people. Some migrant workers earn very little, but they contribute a lot to society.

Zhu Zhengfu also said that economic development has come to the point that we can not rely on cheap labor to maintain economic development. The labor contract law can better reflect the legal norms and better reflect the spirit of the rule of law and the fruits of reform and opening up.

"But at the moment, there are mistaken ideas about the understanding of the new law," Gu said.

Take the most unfixed term of labor contract as an example.

He believes that a stable workforce is also good for businesses.

In Japan, the employment system is basically a "lifetime employment system". The sense of belonging and responsibility of workers is very large. Such a team will naturally benefit the development of enterprises.

In this sense, an unfixed term labor contract is not a big meal, but a lazy person. "This is the hope of long-term employee service, and the" iron rice bowl "is the two concept.

However, Gu Yi Li also said that the law should be improved in some aspects, such as double pay and no fixed term labor contract.

If the concept is unclear and the operation is very difficult, he suggests that the relevant provinces should formulate relevant implementation details as soon as possible.

Official assistance in industrial upgrading, Chen Guoxing, director of Taiwan Affairs Office of Guangdong Province, said on the 28 day that in response to the challenges faced by Taiwan funded enterprises in Guangdong, Guangdong is leading Taiwan funded enterprises to gradually achieve industrial upgrading and orderly pfer.

He said that in view of the characteristics and challenges faced by Taiwanese funded enterprises in Guangdong, Guangdong is implementing the development strategy of "promoting the pfer of industries in the Pearl River Delta and increasing support for the development of mountain areas".

For example, he said, in August last year, the Promotion Association held the investment promotion forum of Taiwan torch footwear industry base in Zhongshan Torch Industrial Park, and invited more than 200 Taiwanese businessmen to participate in the footwear industry in the Pearl River Delta. At present, nine shoe manufacturers have pferred to the park.

At present, there are more than 2.2 Taiwanese funded enterprises in Guangdong and one of the most concentrated provinces in Taiwan funded enterprises.

Since last year, the Chinese authorities have implemented a number of policies, including reducing tax rebates, implementing the labor contract law, and strengthening environmental protection policies. The cost of investment in Taiwan funded enterprises in Guangdong has risen sharply and business has been difficult, especially in labor-intensive enterprises.

Guangdong enterprises are frustrated by official efforts to check related pactions. In view of the fact that foreign companies often avoid tax by pfer pricing (i.e. related party pactions), mainland tax authorities are increasingly strict in investigating related party pactions.

In recent years, more than 100 Taiwan funded electronic enterprises in Dongguan have been notified of self reporting and self reporting.

According to the analysis, the investigation of the national related paction shows the determination of China's industrial upgrading, and it may also be a part of the mainland's strategy to make the processing enterprises "move to the Midwest or upgrade", which will make Guangdong's processing enterprises even more difficult to survive and have to accelerate the pace of pformation or move away.

Recently, a large number of labor-intensive enterprises in the Pearl River Delta have been migrated or closed down.

It has been reported that there are still some Pearl River Delta enterprises left behind to wait and see, with Hong Kong enterprises as high as 60%.

For them, staying or staying, and seeking development are pressing problems.

The industrial and Commercial Times reported that the amount of tax paid by many Taiwanese funded enterprises will exceed ten million yuan as the related pactions can be traced back to ten years.

According to local Taiwanese businessmen, including a pointer type Taiwan funded electronics company in Changan, Dongguan, at least ten Taiwanese companies have to pay more than ten million yuan in the self-examination and self reporting operation, and even three of them will probably break fifty million. This time, the local tax authorities' actions involve many Taiwanese businessmen, and the amount of money needed to be set up.

Li Xiaoyun, senior manager of PWC's taxation department, said that since the mainland promulgated the new enterprise income tax law in March 2007, it has grasped closely related pactions. In particular, Taiwan, Hongkong and Japan used to take the related pactions between overseas parent companies or holding companies and mainland subsidiaries as tax shelters, so that the mainland felt that their taxes were significantly short.

Li Xiaoyun pointed out that the current mode of mainland investigation and seizure has been pferred from individual to factory investigation to collective self-examination.

Since the end of last year, Dongguan has launched large-scale collective self-examination of the electronics industry. At present, the Dongguan Local Taxation Bureau is still hearing more than 100 electronic businesses that have been notified by themselves. As Taiwan businessmen are the main force in Dongguan's electronics industry, these self inspection enterprises are mainly Taiwanese businessmen or even well-known enterprises.

Gong Mei, senior manager of PWC Shanghai branch, said that Taiwanese businessmen from East China's Shanghai, Kunshan and Suzhou were required to provide pfer pricing documents to explain the contents of related pactions.

In fact, as long as Taiwanese businessmen fill in the 363 form (functional risk and financial analysis form), the IRS will warn Taiwanese businessmen, she said.

Li Shangyi, director of the taxation department of PwC southern China, said that the mainland's search for related pactions has spread from the big cities such as Shanghai, Suzhou, Beijing, Guangzhou and Shenzhen to Qingdao, Dongguan, Foshan, Zhongshan, Shunde and even inland. The size of the companies under investigation has also expanded from large enterprises earning more than hundreds of millions of yuan to one hundred million SMEs.

Ye Chunrong, President of the Dongguan Association of Taiwanese businessmen, said that in recent years, related pactions have been held.

Dongguan has been notified of the fact that there are not only more than 100 enterprises that are self-examination, but it depends on the circumstances of individual enterprises when it comes to the degree of impact.

Wu Defeng said that the number of retroactive years of mainland related pactions has been changed from three years to ten years. Once the IRS finds that the profits and profits of enterprises are unreasonable, it will require enterprises to conduct self-examination and submit a report on related pactions within a certain period of time (about thirty days). If there are unmatched persons, the tax authorities will be able to raise profits and recover the past tax arrears.

To assist Taiwanese businessmen in understanding the new enterprise income tax law of the mainland, the Taiwan capital accounting firm was led by Xue Mingling, director of the tax law service department, and Wu Defeng and the Ministry of Taxation from 27 to 28 this month. They held seminars in Dongguan and Wuxi jointly, and became the focus of attention of the participants in Wuxi.

In the past, many Taiwanese businessmen often used the means of high and low turnover in related pactions as a way to avoid tax and increase the revenue of their parent companies. Now the key point for mainland officials to rectify the tax revenue has come to related pactions.

Li Xiaoyun, senior manager of PWC tax department, said that many Taiwanese businessmen invested mainly in the electronics industry, so they became the focus of attention.

She said that foreign investment in Dongguan accounted for 70% of the total electronic industry, but tax accounted for only 12.7% of the total tax revenue, while the mainland and international electronics industry profits of about 5% to 7%, but Taiwan businessmen only 1%, the mainland tax authorities will doubt.

Taiwanese businessmen have many electronics factories in Qingxi, Changan and Shijie in Dongguan. They will be swept away in the rectification of related pactions.