Local government calculations and miscalculations

  "China News Weekly" reporter / Xu Dawei and Su Jiede

  Issued in the 959th issue of China News Weekly on January 10, 2020.8.

  The former star of the new forces of Chinese car-making, Sailin Motors, has been shut down.

  Sai Lin Automobile Chairman Wang Xiaolin, who was accused of "taking 6.6 billion state-owned assets with empty gloves", traveled far away from the United States, and was separated from the city of Rugao, Jiangsu. Like a "Rashomon", the Serin incident in the whirlpool still has many questions behind it. With the closure of the Sailin factory and the freezing of accounts, all employees have resigned, and the future of the new energy automobile industry in Rugao, Jiangsu Province has also been clouded.

  Chen Jianjun, deputy director of the Propaganda Department of the Rugao Municipal Party Committee, admitted to China News Weekly that the lessons left by the Sai Lin incident seem to be Rugao on the surface, but not only Rugao. Departments should also learn from this: they cannot swarm all the new energy vehicle projects, and more stringent audits are required for the qualifications of some companies."

  Since 2009, China has launched a new energy vehicle development strategy, and various supporting policies have been intensively introduced. Since then, as the subsidy policy has continued to heat up, under the catalysis of policies and funds, the track of new energy vehicles has been unprecedentedly crowded, and new energy vehicle projects with tens of billions of investment have landed one after another. cake". Statistics show that from 2015 to the first half of 2017, more than 200 new energy vehicle production projects have landed in China, involving an investment of more than 1 trillion yuan and a planned production capacity of 21.24 million vehicles.

  However, entering 2019, the auto market is sluggish, subsidies are declining, and the prosperity is no longer. After the passion has subsided, the capital market has returned to rationality. China's new car-building forces have fallen into a "battle royale", and the number of companies has dropped to about 40. Some places have also fallen into embarrassment due to the impulse to build cars.

  Li Jinyong, vice president of the National Federation of Industry and Commerce Automobile Chamber of Commerce, told China News Weekly that the automobile industry is too attractive for local governments. It can pull the entire industry chain and pay the most taxes. On the one hand, new energy vehicle projects have been thundered or unfinished. On the other hand, the local government’s enthusiasm for investment in the automobile industry has not diminished. The "Serin Incident" may not be the last.

A brief history of car making in county-level cities

  Rugao is located in the north wing of the Yangtze River Delta and is a county-level city under the jurisdiction of Jiangsu Province. This small city with a population of about 1.42 million has become a city of new energy automobile industry that has attracted much attention in Jiangsu Province in recent years.

  In 2008, the international financial crisis broke out. In the face of the global shipbuilding industry downturn, the continuous decline of the photovoltaic industry, and the difficult situation of the biomedical industry, Rugao set its sights on the new energy automobile industry, looking forward to the development potential of the new energy automobile industry, which can provide Rugao with The stamina of economic growth. Chen Xiaodong, Deputy Mayor of Nantong City and Secretary of the Party Committee of Rugao, once stated that Rugao's choice to develop the new energy automobile industry is a strategic choice.

  For Rugao, it is not easy to develop the new energy automobile industry. In 2010, Rugao successfully introduced the first new-energy vehicle production company, Luzhizhou, and the curtain opened. As a major project in the "Twelfth Five-Year Plan" of Jiangsu Province, the Luzhou Zhou project plans a total investment of 4 billion yuan and is expected to form an annual production scale of 200,000 electric vehicles.

  However, Luzhouzhou did not obtain the production qualification initially. Liu Changli, general manager of Jiangsu Luzhouzhou, once disclosed to the media that with the help of the Rugao government, the Luzhouzhou merged with the Rugao Bus Plant and obtained the new energy large and medium-sized passenger car production qualification.

  The layout of Rugao's new energy vehicle industry is led by the Luzhizhou project. In 2012, Rugao was identified as the only new energy automobile industry base in Jiangsu Province by the Economic and Information Commission of Jiangsu Province. Rugao has begun to make great strides in the field of new energy automobile industry.

  In November 2013, the Kangdi electric vehicle project settled in Rugao. The total investment of the project is about 1.2 billion yuan. After completion, it will form an annual output of 100,000 sets of key components for new energy electric vehicles. It hopes to build a pure electric vehicle, A "micro bus" system that provides citizens with time-sharing car rental services.

  Wang Xiaoxiang, a new energy vehicle industry development consultant for the Rugao Municipal People's Government, told China News Weekly that Kangdi Electric Vehicles originally produced low-speed electric vehicles (commonly known as "old scooters") and used lead-acid batteries instead of lithium batteries. Kangdi Automobile wanted to upgrade to a mini-electric car, but because it had no production qualifications, it found Geely "backdoor". Geely wants to cooperate with Kangdi and use Kangdi's brand due to the limitation of product series. After the cooperation between the two parties, eager to find a production base, they found Chen Xiaodong, then mayor of Rugao, and the three parties hit it off. In this way, Kangdi Group, which previously mainly produced low-speed electric vehicles and did not have the qualifications for auto production, realized backdoor production in Rugao after being acquired by Geely Automobile.

  In order to seize the policy vents of the new energy vehicle industry, Rugao established the Rugao New Energy Vehicle Demonstration and Application Leading Group in 2014. The group leader is the then mayor Chen Xiaodong, and the deputy group leader is the municipal party committee member and the then Rugao Economic and Technological Development Zone. Ma Jinhua, deputy secretary of the Party Working Committee. According to people familiar with the matter, Ma Jinhua is the main promoter of Rugao's new energy vehicle project.

  However, the development of Ludizhou and Kangdi Automobile projects since then has not been satisfactory. The Luzhizhou Jiangsu project has been questioned by public opinion due to illegal enclosing land. Before that, Luzhizhou had only passenger car production qualifications. After obtaining the first new energy vehicle production license in the low-speed electric vehicle field, Luzhizhou announced its entry into the new energy passenger vehicle field. The plan has been "stranded".

  Lu Zhizhou initially estimated that after the project is completed and put into production in 2020, it will achieve an annual production capacity of 200,000 vehicles, an output value of 30 billion yuan, and a profit and tax of 7.5 billion yuan. It will become another flagship enterprise in the pillar industry in Nantong. However, now the Lu Dianzhou has been reduced to the point of being auctioned by creditors. On the Alibaba auction website, the head office of Ping An Bank issued a "Debt Transfer of Jiangsu Luzhizhou New Energy Electric Vehicle Co., Ltd." in June 2020, showing that since Lu Zhizhou still owes Ping An Bank a principal of 112.3 million yuan and an interest of 1.257 million Yuan, unable to repay, the company has stopped production at present. Due to the inability to recover the money, Ping An Bank is transferring 24% of the shares of Jiangsu Luzhou New Energy Electric Vehicle Co., Ltd. and more than 280,000 square meters of industrial land.

  The asset selling point is described as follows: There are only 19 new energy vehicle production qualifications nationwide. It has independent intellectual property rights in the core technology of electric vehicles. It is the first high-tech enterprise to independently engage in the development and production of core technology of electric vehicles. Its products cover passenger cars and logistics vehicles.

  In the new energy vehicle supplement fraud incident that occurred in 2016, Kangdi electric vehicles were exposed to serious fraudulent behavior. Since 2017, Kangdi Group and its subsidiaries have been sued for payment of arrears to suppliers, and their equity has been pledged and frozen. In May 2018, the National Development and Reform Commission issued a notice requesting Kangdi Jiangsu Project to rectify, pointing out that the Kandi Jiangsu project’s investment entity, Kandi Electric Vehicle Group, is not strong in funding, and sales revenue and profits have continued to decline in the past three years. Assets in 2017 The debt ratio is as high as 83%, and Kangdi Jiangsu's debt ratio is as high as 92.3%, requiring rectification of the project.

  In 2016, Pang Qingnian's Youth Automobile founded the Youth Yaman vehicle production enterprise in Rugao Development Zone to produce hydrogen fuel logistics vehicles. In Rugao's eyes, hydrogen energy is another outlet. Three hydrogen fuel cell buses developed by Youth Motor and Baiying Energy were put into operation on the Rugao 102 bus route. However, these three hydrogen-fueled vehicles, due to insufficient hydrogen energy and difficult to replenish, resulted in insufficient electricity. They could only stop and go, and they were put on hold after only more than 20 days of operation. The "hydrogen car" scam was finally shattered, and the youth car has also become a "hot potato" from the "guests" of local governments.

  "Scams similar to youth cars' turning water into hydrogen can have a market, which shows the local government's enthusiasm for the introduction of complete vehicle projects." Cao He, president of Quanlian Automobile Dealer Investment Management Co., Ltd., told China News Weekly.

  For Rugao, the new energy vehicle project has always been a huge attraction. "Everyone wants big projects! When an auto project is completed, the GDP of the whole place will rise to a higher level." Wang Xiaoxiang told China News Weekly that for local governments, the auto industry has a "1: 7 theories": That is, a job in an automobile company can drive 7 jobs in the automobile-related industries.

  Cui Dongshu, secretary-general of the National Passenger Vehicle Market Information Joint Council, told China News Weekly that the core goal of local governments is to stimulate economic development. To stimulate economic development, it is necessary to create increments, and a new energy vehicle project can produce good results for the local area. The conceptual pulling effect. Based on a new energy vehicle worth 200,000, if the production capacity can reach 100,000 units, it means that the project can generate an output value of 20 billion yuan. For the government, the performance is remarkable.

  In 2002, Dongfeng Yueda Kia settled in Yancheng, Jiangsu, and quickly became the economic pillar of Yancheng. Relevant data shows that in 15 years, Dongfeng Yueda Kia has achieved a total of 455 billion yuan in operating income, a total of 43 billion yuan in taxes, more than 8,000 direct employees, and more than 30,000 indirect employees. This makes many surrounding cities envy.

  "The local government wants to build a decent vehicle production base, at least it needs to invest several billion yuan in order to drive the local automobile industry chain to gradually expand." Cao He said.

  In fact, whether it is the introduction of Xiaopeng Motors in Zhaoqing of Guangdong, the introduction of Weimar Motors in Wenzhou of Zhejiang, or the introduction of Sailin Motors in Rugao, they are all regarded as local "Project One." Most of these new energy vehicle projects exist in the form of "new energy vehicle industrial parks", and they are blooming everywhere.

  According to public information on the official website of Rugao Economic and Technological Development Zone: Rugao New Energy Automobile Industrial Park was established in 2009 and has been approved as a provincial new energy automobile production base, new energy automobile characteristic industrial cluster, new energy automobile and parts industrial park, with a planned area of ​​20 Square kilometers. The park has well-known domestic and foreign new energy vehicle companies such as Luzhizhou, Geely Kangdi, Jinbei Rugao Branch, Yingtian Group, Youth Yaman, etc., as well as Double Coin Tire, Baiying Energy, Zehe New Energy, Longneng lithium battery, Nearly 30 new energy vehicle supporting enterprises such as Yankang Auto Parts and Chuangyuan Electrochemical.

  The goal of the industrial park is to achieve the "8132" target by 2020, that is, the annual production capacity of complete vehicles will reach 800,000, the output value will reach 100 billion yuan, there will be 3 enterprises with taxable sales exceeding 10 billion yuan, and taxable sales of the service industry will exceed 100 yuan. There are 2 enterprises with a total value of 100 million yuan to build the "China's most competitive new energy vehicle industry base" with new energy vehicle manufacturing as the leader, key component industry cluster as the support, and hydrogen fuel-powered vehicles as the forerunner. The "Modern Automobile Industry City in the Yangtze River Delta Region" integrates manufacturing, commerce, finance, culture, service and sports.

  The high cost of introducing a complete vehicle project also means that the government faces a high risk of failure. From Luzhou Zhou to Youth Automobile to Sailin Automobile, the whole vehicle projects introduced by Rugao collapsed one after another, completely sinking into the quagmire of car building. The dream of building a "modern automobile industry city in the Yangtze River Delta" is also getting bleak.

  The hidden worries of "car-making enclosures"

  Under the impulse to build cars, not only Rugao, but also many parts of China are "hungry" for industries. In 2015~2017 alone, Zhejiang Province added more than 20 new energy vehicle investment projects.

  In order to attract new energy vehicle projects to land, local governments have resorted to every possible means and given various preferential conditions. The investment wars surrounding new energy vehicles are constantly being staged in various places and competition is fierce. For example, Qingdao, Shandong, rewards up to 100 million yuan for newly introduced new energy vehicle companies. Hubei Xiaogan City will give a one-time reward of 50 million yuan to complete vehicle companies registered to produce new energy vehicles in the local area.

  An investment promotion officer from a provincial-level development zone in Jiangsu told China News Weekly that the preferential policies offered in terms of land and capital for investment in various regions are similar, and the flexibility of comprehensive incentives and subsidies is not large, and only services can be provided. For large projects, the "top leader" will personally lead a team to visit the door to negotiate, fighting for a combination of sincerity and the policy of "one matter, one discussion". At that time, there was a lot of competition for the Sailin project, and the settlement conditions provided by all parties were very attractive. In order to let Sailin land, the Rugao government also spared no effort.

  Where to build a car project, production qualifications and land allocation are the core considerations.

  In 2015, the state began to manage the entry of new energy vehicle companies. The National Development and Reform Commission issued the "Regulations on the Management of Newly Built Pure Electric Passenger Vehicle Companies". Only car companies that pass the review can obtain the qualification for pure electric vehicle production. After the regulations are issued, from 2016 to 2018, the production qualification of pure electric vehicles will be like a "golden key", which is a scarce resource. As of 2018, when the entry of new energy car companies was closed, the state had issued only 15 licenses.

  For the new car-making forces that have entered the bureau, the qualification for the production of new energy vehicles is a "birth permit", and lack of qualification means that the product cannot be implemented. The auto industry analyst Zhong Shi told China News Weekly that the new energy vehicle production qualifications set a higher threshold. The intention of the state ministries and commissions is that there are too many companies. It is necessary to clean up the licensed "zombie companies". The original qualifications will become the industry. The "filter".

  However, helping new automakers obtain qualifications has become a bargaining chip for local governments to attract investment. Wang Xiaolin told China News Weekly that Rugao’s commitment to settle down at that time included the provision of automobile production qualifications.

  And Lu Zhouzhou, through the government's help to merge the local bus factory, obtained the new energy large and medium-sized passenger car production qualification. In 2017, Luzhizhou obtained the 14th domestic production qualification for new energy passenger vehicles. At that time, the industry generally believed that the Luzhouzhou brand was insufficient, and even if passenger cars were launched, the production and sales would not be very high. The reason why Lu Zhizhou was able to get the license is most likely because he won the "local government" card.

  Zhong Shi told China News Weekly that there is a game between state ministries and local governments around the qualifications of electric vehicle production. Too high a threshold affects the interests of local governments. In order to ensure the survival of local manufacturers, they can only buy shells.

  Land is another bargaining chip for local governments to attract car projects to settle down. Whenever new energy vehicle projects land, "staking horses and enclosures" is the usual operation. Sailin Motors landed in Rugao, with a total area of ​​2,400 acres under the planning of the third phase, and 958 acres in the first phase. The Luzhizhou project is planned to be 1,200 mu, and the first phase will occupy 432.93 mu.

  Some media selected 16 new car-building forces to study and found that 8 companies used more than 1,000 acres of land for projects, and the remaining 8 projects also used 100-950 acres of land. Many of these large tracts of land are sold at prices lower than the market price.

  Cui Dongshu told China News Weekly that the new car-building forces obtained large amounts of land at low prices through "enclosures". Because of the rapid increase in land value, even if they could not build cars, they could profit by selling land at high prices.

  The “land game” of Huatai Automobile, which took place in Ordos, Inner Mongolia, is the most typical. The automobile industry has always been something that Ordos desperately wants to introduce. For this resource-based city, industrial "transformation" is not easy. To attract projects to land, the only bargaining chips that can be paid are land and coal.

  At the price of 10,000 yuan per mu, Huatai Automobile obtained 6000 mu of land and two coal mines as a gift. When Chery Automobile landed in Ordos with an investment of 20 billion yuan, the government also equipped a coal mine of 1.66 billion tons.

  According to media reports, Huatai Automobile has benefited a lot from investing in automobile projects in Ordos in exchange for income from coal mines and land. In January 2008, Huatai Automobile introduced Anhui Huainan Mining Group to the Tangjiahui Coal Mine with reserves of 800 million tons. The two parties jointly established Ordos Huaxing Energy Co., Ltd., in which Huatai Automobile indirectly holds 30% of the equity. In the same year, Huatai Automobile sold the mining rights of the Nianpanliang coal mine to Shanxi Puda Coal Industry Group for a direct profit of 700 million yuan. In addition, although 2/3 of Huatai Automobile's factory in Ordos is still wasteland, the land price has risen by 8 times.

  But on the other hand, Huatai's car manufacturing business is "mud that can't help the wall." Huatai's car sales have been questioned by the industry as "full of moisture". From 2008 to April 2011, the actual number of Huatai Motors in the Ministry of Public Security was 45,000, and the data reported to the China Automobile Association was as high as 183,000, a difference of more than three times. In 2011, due to the long-term serious fraud of Huatai Automobile's sales data, the China Automobile Association once refused to accept the data reported by Huatai Automobile, and its sales figures were replaced by "0".

  Since February 2018, Huatai Automobile has been in arrears of employees' wages, involving more than 1,000 employees. The latest announcement also shows that the current overdue amount of direct liabilities of Huatai Automobile amounts to 3.892 billion yuan, of which the amount involved in litigation is 3.892 billion yuan.

  Nowadays, the plot of Huatai Automobile's production base is already in the central urban area. For this large area of ​​Huatai factory area, which is buried in the grass, the local government wants Huatai Automobile to relocate it in order to reuse it. However, both the government and the enterprise went to court because of the land issue. In early 2017, the Kangbashi New District Bureau of the Ordos City Land and Resources Bureau sued Huatai Automobile to the court, requesting Huatai Automobile to hand over real estate such as buildings and land within a time limit and go through the asset transfer procedures. Huatai Automobile also filed a counterclaim and filed a compensation claim of nearly 3.358 billion yuan for demolition and resettlement. In the end, the Inner Mongolia Autonomous Region Higher People's Court determined that it rejected the appeals of both parties because it did not meet the conditions for acceptance.

  So far, Huatai Automobile is still arguing with the Ordos government over a dispute over the property rights of 6000 acres of land in the central urban area.

  In the view of Master Zhong, the new car-making forces are eager to enclose the land and there is another "Small Nine-Nine": "They hope to take advantage of the enthusiasm of the project that has just landed, and get more land, lest the future development of the project is not good and the government's enthusiasm , No matter how difficult it is to get land."

  For local governments, due to the long-term lack of restrictions on land approval authority, land has become a weight for manufacturers to realize their profits. Once the project becomes "yellow", what the local government has to deal with is a land mess full of disputes.

  The government becomes "venture capital"

  In 2020, the death list of new car-building forces is getting longer and longer: Bojun Automobile, which was once surrounded by capital, collapsed due to lack of money, and Byton, Zhidou, and Future...

  "In the future, three or five new car-making forces will survive." Li Jinyong, vice chairman of the National Federation of Industry and Commerce Automobile Chamber of Commerce, predicted to China News Weekly that an industry "shuffle" is inevitable.

  Cui Dongshu told China News Weekly that new energy vehicle manufacturers are small and the industrial chain is extremely weak, while the cost advantage of traditional fuel vehicles is based on the production scale of tens of millions of units. This gap has caused the cost of new energy vehicles to remain high. .

  However, the new Chinese automakers who have been looking for money are no longer the darlings in the capital circle. The entire auto market has oversupply. With subsidies declining, some new automakers have exploded. Many business models have been falsified. The capital market is also aware of the risks of the new energy auto industry, and investment is becoming more rational and cautious. Zhang Wei, chairman of Cornerstone Capital, even stated that there is no new energy vehicle manufacturer in China worth investing in.

  Investors liken investing in new car-making forces to "betting on horses." As the reshuffle accelerates, the situation becomes clearer and investors will only bet on the front runner. Wang Xiaoxiang, a new energy vehicle industry development consultant for the Rugao Municipal Government, calls the new car-making forces that have entered the game "the mouse in the bellows". It is impossible to raise funds and it is difficult to get out.

  The support of local governments is indispensable for the survival of new car-building forces. Local governments have also evolved from traditional land and resources to real money support. In fact, local governments are becoming the largest financing channel for new car-building forces.

  Zhong Shi, an automotive industry analyst, believes that it is precisely by taking advantage of the local government’s urgent economic development mentality that new auto-building forces have “shared risks” with the local government through bundling with state-owned assets. This makes car-building projects often have problems with state-owned assets. It's hard to get away.

  At the end of June this year, according to CCTV Financial Report, Byton Motors, a representative of the new car-building forces, fell into an operating crisis and owed employees wages for four months. In addition, Byton's Shanghai office withdrew its lease in April, and its Beijing office withdrew its lease on June 17. The Nanjing plant has recently shut down due to arrears of water and electricity.

  The Nanjing Economic and Technological Development Zone is also worried about the huge losses that Byton Motors may bring to the park. "We are also afraid that we have invested several billion yuan. Once it becomes dirty, it will be a waste. Who will pay the debt, not just this. Debt, all debts of the company must be accepted." The staff of the park management committee said in an interview with the media.

  This makes local governments in fact become venture investors in the recruitment of new energy vehicle projects. Many auto industry insiders told China News Weekly that it is often difficult for local governments to identify the technical background of new car-building forces, and it is difficult for speculators like Sailin to stop them. More importantly, local governments often lack the awareness of risk management and control of projects, and the investigation of project background is also a mere formality, which increases the risk of project "explosion" and loss of state assets.

  In order to control the risks of vehicle projects, some local governments are also introducing risk control mechanisms. When Shanghai introduced the Tesla project, it signed a gambling agreement with it. Tesla got a loan in China with an annual interest rate of 3.9% and got land at one-tenth of the market price. The Shanghai Municipal Government requires that the Tesla Shanghai Super Factory will have to pay 2.23 billion yuan in taxes every year from the end of 2023. If this condition is not met, the corresponding land must be returned. At the same time, Tesla must also invest 14.08 billion yuan in capital expenditures within 5 years.

  The "hand in hand" between Weilai Automobile and Hefei State-owned Assets has attracted more attention. The industry believes that Weilai's financing is essentially a "high-performance gambling" equity financing. According to the previous agreement, Weilai Automobile and the three state-owned strategic investors-Hefei Construction, SDIC China Merchants and Anhui High-tech Industries, invested more than 10 billion yuan in "NIO China" in five stages. This shows the cautious and careful planning of Hefei state-owned investment.

  The "gambling agreement" signed by Weilai Automobile and Hefei sets high KPI indicators for Weilai China in terms of revenue, taxation, product development and sales. For example, in 2020, Weilai Automobile’s revenue needs to reach 14.8 billion yuan, which will increase to 120 billion yuan after 4 years. Based on the average price of Weilai Automobile’s bicycles of 300,000 yuan, the average annual sales volume needs to reach 400,000 vehicles. The pressure is not small. .

  In the eyes of industry insiders, this time Hefei "venture investment" NIO has provided another operating idea for traditional government capital investment. Hefei's introduction of "potential stocks" such as Weilai Auto is equivalent to introducing a potential industrial growth pole for itself in the auto industry, and it has also purchased a set of "engines" for the upstream and downstream of the auto industry. The "gambling" agreement is similar to the project's "tightening spell", which is equivalent to a set of insurance mechanisms.

  Experts believe that there are many irregularities in the investment implementation process of some local governments, and the impulse of political performance and the lack of binding power system amplify the risks of the project, so more careful system design is needed to follow up.

  The new curse

  Jiangxi Province has been criticized by the National Development and Reform Commission for overheating investment in the field of new energy vehicles.

  Jiangxi's new energy automobile industry has the largest investment enthusiasm in the country, but its capacity utilization rate is significantly lower than the national average. According to relevant statistics, of the 18 new energy vehicle investment plans introduced by Jiangxi Province between 2015 and June 2017, 7 of them did not have any information on the start of construction after the contract was announced. Among the 11 projects that have already started, More than half were not completed on schedule.

  Xia Yingjie, a member of the Jiangxi Provincial Committee of the Chinese People’s Political Consultative Conference and chairman of Jiangxi Jiangling Overseas Automobile Sales Service Co., Ltd., once warned that the capital and R&D strength of Jiangxi vehicle companies are generally weak, and the threshold for approval of new energy vehicle industry projects in Jiangxi Province should be raised. , Manufacturing and quality control, marketing team and capabilities, project funding composition and other aspects to evaluate and control to avoid low-end structural overcapacity.

  In an interview with the media, Ren Wanfu, an automotive industry analyst, said that the investment boom in new energy vehicles is not unique to Jiangxi. Some cities without any automotive industry chain base hope to build high-rise buildings on the ground, and there are many chaos of blind investment promotion. However, the development of the auto industry cannot be accomplished overnight. A sound industrial chain and a talent pool require long-term accumulation. With the investment boom in new energy vehicles, it is easy to attract projects with the “enclosure policy”. Once the project investment fails, for the local government, the aftermath will be more difficult.

  Most of the new car-building forces died on the beach, but the chicken feathers left behind still have to be cleaned up by the local government. In addition to debt and employee wages, another mess that the local government has to solve is how to deal with idle land. Chen Jianjun, deputy director of the Propaganda Department of the Rugao Municipal Party Committee, told China News Weekly that the Sailin car project involves more than 900 acres of land, and Rugao will revitalize it as soon as possible to minimize the loss. The Ranger Huzhou Automobile Factory, which is also difficult to open, also left a large area of ​​land.

  According to Zhong Shi, an automotive analyst, local governments generally invest in land and factories, which speculators cannot take away. If the project fails, the land and factory resources can be used for other purposes. The loss in this regard will not be too heavy. Cui Dongshu told China News Weekly that after the project exploded, it was the bank that really became the "receiver". "The money invested by the government comes from the bank, and it will become the bank's invisible bad and bad debts."

  In order to put a new curse on all regions and avoid frequent new energy vehicle explosions, the "Automobile Industry Investment Management Regulations" will come into effect on January 10, 2019. The "Regulations on the Administration of Investment in the Automobile Industry" set many thresholds for the entry of new energy automobile manufacturers. Among them, the requirements: the province where the investment project of the new independent pure electric vehicle company is located, the vehicle capacity utilization rate in the last two years is higher than the industry average of the same product category; the existing new independent pure electric vehicle enterprise investment projects of the same product category have been completed and The annual output reaches the construction scale.

  Although the "Regulations" delegated the authority to approve projects in the automotive industry to provincial government departments, it does not mean that local governments can "open the gates and release water." On the contrary, there are strict requirements for local governments that want to launch new energy vehicle projects. For example, before approving new electric vehicle projects, they need to clean up new energy zombie car companies; there are already new energy vehicle projects, and they can’t approve them before they reach production. new project. There are also clear requirements for the project investment of new energy vehicles, such as no withdrawal of capital before mass production of the project, the need to master the core technology of electric vehicles, and only products with its own registered trademarks can be produced.

  Jia Xinguang, chief analyst of the China Automotive Industry Consulting and Development Corporation, told China News Weekly that the National Development and Reform Commission has delegated the approval of new energy vehicle projects to the provincial level and required that the capacity utilization rate of new energy vehicle projects must meet the standards. Provincial governments should strengthen quantitative control and pay attention to balance.

  In addition, local governments must give more consideration to the feasibility of the project. In the past, the local government’s attitude towards projects was the more the better. Now provincial governments often choose to focus on supporting one or two key projects. "Now if a project becomes yellow, the National Development and Reform Commission will most likely terminate all other projects for you." Jia Xinguang said.

  Many experts suggested that after the authority to approve qualifications is delegated to local governments, local governments need to strengthen the supervision and early warning of new energy vehicle production capacity.

  China News Weekly, Issue 29, 2020

Statement: The publication of "China News Weekly" manuscript is authorized in writing