Two Sessions | Alumni Yuan Zhimin: The Guangdong-Hong Kong-Macau Greater Bay Area Accelerates for High-tech Enterprises

Yuan Zhimin, deputy to the National People's Congress, chairman of Guangzhou Federation of Industry & Commerce, chairman of Kingfa Science & Technology Co., Ltd., and EMBA alumni of the Business School, told reporters during his attendance at the two sessions of Guangdong early in January this year that the biggest concern of the two sessions this year was how the government further reduced taxes and fees.

The national two sessions came as scheduled, and the government work report brought great surprises to the enterprises. Yuan Zhimin said in an interview with the Guangzhou Daily All Media reporters: "This really has exceeded our expectations. We all feel this is a big gain when we entrepreneurs sit together and discuss about it, and this has been the biggest government 'red envelope' since we started doing business. I thought that it dropped 1% last year, and it would drop another 1% this year. I did not expect it would drop straight 3%. This has also been the most affordable report I’ve seen for 7 years as a NPC deputy."

Bay Area Opportunity: Seize the Dividend to Achieve High Quality Development

The construction of Guangdong-Hong Kong-Macao Greater Bay Area  is about to bring the development dividend to the enterprises in the Bay Area. This makes Yuan Zhimin especially excited. "More opportunities, more paths of ours."

According to Yuan Zhimin's analysis, the Guangdong-Hong Kong-Macau Greater Bay Area is a unique bay area in the world, with the superiority of "One Country, Two Systems". As the enterprises in the Bay Area, we must seize this historical opportunity and accelerate the path of high-quality development. "What does high-quality development mean for the enterprises?" Yuan Zhimin said, "That means the development of enterprises needs to have technical content. First, it needs technological innovation, and innovation needs talents."

In the 1990s, Yuan Zhimin was the first graduate students of flame retardant materials graduated from Beijing Institute of Technology. He went south to Guangzhou with several classmates, embarked on the road of self-employment, and founded a company. Up to now, in the field of modified plastics, they are the largest and most complete range of modified plastics manufacturer in the Asia-Pacific region. Products are mainly used in automobiles, home appliances, modern agriculture, rail transit, aerospace, high-end equipment and so on.

In addition, Yuan Zhimin's team independently researched and developed fully biodegradable plastics. In 2004, they first began to research and produce biodegradable materials in China to replace the white pollution-source polyethylene (PE). At present, the product technology is mature and stable, and has good promotion and market benefits abroad.

Talents Innovation: Attract Talents To Save Enough Momentum for The Enterprises

"When we started our business, we took human capital as the first capital of the company." Yuan Zhimin said that years of struggle have taught him that talent and innovation are inseparable. After 25 years of development, Yuan Zhimin's team has a scientific research team composed of more than 100 doctors and more than 600 masters, which has become the source of enterprise innovation vitality. Yuan Zhimin believes that the international business environment of Guangdong-Hong Kong coastal Greater Bay Area will further attract the gathering and rational flow of high-end talents, and will also facilitate more interaction in research and development among Guangdong, Hong Kong and Macao, and facilitate the allocation of investment and financing, so as to enhance the innovation ability of enterprises and save enough momentum for the development of enterprises.

In attracting talents, Yuan Zhimin also noticed the individual income tax reformed in 2018, in general, the individual tax burdens of all income groups have declined to different degrees, among which middle-income employees benefit the most. However, for those high-tech and high-level professionals at home and abroad, they enjoy less dividends of this income tax reform. It mainly reflects in these higher tax rates of 30%, 35% and 45%, which have not changed in the reform, and this part is just the watershed of high-end professionals with high tax burdens.

Yuan Zhimin believes that the current unified preferential tax policy for high-end professionals of China is limited to a small number of top professionals, such as academicians and distinguished experts who enjoy special government allowance, but does not cover most high-end professionals. Therefore, Yuan Zhimin suggested further adjustment and improvement of the individual income tax law and implementation of the policy of lowering the individual income tax rate for high-end professionals. For high-end talents, the individual income tax can be reduced by means of individual tax refund and increasing subsidies, so as to further enhance the attractiveness of China to international high-end professionals.

Tax cut And Fee Reduction: The aspirations of Private Enterprises Become A Reality

In addition to the tax cuts exceeding expectation in the government work report, the fee reduction has really reduced the burden on enterprises. Yuan Zhimin said: "Take the examples of social insurance premiums and electricity bills, the contribution rate of the enterprises for urban employees' basic endowment insurance has been reduced to 16% in all regions. In the past, it used to be heavy burden for enterprises to pay social insurance premiums, but now this level is acceptable for most enterprises. And the report also proposed to reduce the electricity cost for manufacturing, and the average industrial and commercial electricity prices to be reduced by another 10%."

Over the past year, Yuan Zhimin has put a lot of efforts in research, hoping to help private enterprises to enhance their vitality of development, and called for reducing the tax burden to promote the development of private enterprises. In fact, the aspirations of many private enterprises and average working class have gradually become a reality.

In Yuan Zhimin's view, this tax cut and fee reduction will make the concept of "unswervingly follow the path of real economy development" win greater popular support, and increase confidence in the development of real economy.

"There will be more and more opportunities for high-quality development in our country. When the government work report was read to this paragraph, there were four or five rounds of applauses. I think this is the people's approval and People feel more empowered. It reminds me the words that 'When people call, I respond.'. The government has responded to the people's call, for the sake of enterprises and future development of the motherland, and help the development of the real economy." Yuan Zhimin said.

Benefit Enterprises: Reduce Fees And Burden

Take the examples of social insurance premiums and electricity bills, the contribution rate of the enterprises for urban employees' basic endowment insurance has been reduced to 16% in all regions. In the past, it used to be heavy burden for enterprises to pay social insurance premiums, but now this level is acceptable for most enterprises.

Attract Talents: Reduce Taxes And Improve Environment

Further adjust and improve the individual income tax law and implement the policy of lowering the individual income tax rate for high-end professionals. For high-end talents, the individual income tax can be reduced by means of individual tax refund and increasing subsidies, so as to further enhance the attractiveness of China to international high-end professionals.

The Greater Bay Area: Seize The Opportunities

The Guangdong-Hong Kong-Macau Greater Bay Area is a unique bay area in the world, with the superiority of "One Country, Two Systems". As the enterprises in the Bay Area, we must seize this historical opportunity and accelerate the path of high-quality development.

Graphic source: “Guangzhou Daily”, March 13th, 2019, A8 Version

Text: Guangzhou Daily All Media Reporters Yang Yang, He Ruiqi, Jia Zheng, Cai Dongqing, Chen Jiayuan

Photograph: Guangzhou Daily All Media Reporters Yang Yaoye, Luo Changwei

Editor: Wen Xiaojin