Trump shouted "return to the U.S." Sino US manufacturing cost difference in where?
US President elect Trump January 3rd local time on twitter at General Company (GM), or making cars in the United States, or to pay high tax (Make in U.S.A or pay big border tax!). During the campaign, Trump hold high the manufacturing back to the United States, the banner of the United States requires local manufacturing enterprises to stay in the u.s..
In December 2016, Fuyao overseas factories has triggered discussion on Sino US manufacturing industry cost, Cao Dewang Fuyao chairman told the new financial reporter interview, said that "in addition to labor costs higher than the U.S. factories only half of the domestic electricity, natural gas prices are 1/5 domestic enterprises, tax is also cheaper than domestic". So, the data does not support his point of view?
Energy: China is not expensive, but the United States really cheap
Do not consider the exchange rate and price and other factors, compared with other big manufacturing enterprises, Chinese enterprise energy cost is not high, the price of industrial electricity and natural gas prices in the medium level, but compared with the United States, respectively at 60% and 250%. China shale gas network data show that the United States is the world's largest shale gas exploitation of the country, the amount is second times more than the exploitation of Canada, more than 15 times. Abundant shale gas significantly reduced the price of natural gas, not only lower than China, is lower than that of other countries, and the Fuyao Glass manufacturing industry has a high dependence on energy.
Tax burden: light tax burden, indirect tax burden
According to the world bank, in 2016 the total tax rate (Chinese enterprise refers to the enterprise taxes and compulsory payment accounted for commercial profit ratio) was 68%, from 37.2% in 2013 soared to 68.7% after four consecutive years has been high, higher than the world average level of 40.6%, the tax burden in the world's 190 economies ranked twelfth, and with the decline in economic growth.
However, in the IMF (International Monetary Fund) and the accounting firm DDT Research Report has come to the opposite conclusion. Two institutions given the tax burden of Chinese enterprises in 2015 were 29.1%, 25%, not only lower than the United States, but also lower than the world average.
These differences are due to IMF and DDT to corporate income tax and other direct tax as the main statistical caliber, and the World Bank statistics also include labor tax, land value-added tax and other indirect taxes.
In addition, according to the world bank, the total tax rate as high as 68% of the enterprises in China, directly reflect the tax profit tax is 10.8%, lower than the world average level and economically developed areas, and as an indirect tax service tax, namely the enterprise pay for employees "five social insurance and one housing fund", accounted for 48.8%. The proportion is about 3 times the world average of 16.3%.
The tax burden of enterprises under different statistical caliber "constantly changing", confirms the PWC mentioned in the report on the situation of tax Chinese "tax Chinese extremely diverse and complex". A multitude of names indirect cost of enterprise tax increase. According to a 2016 survey by the Chinese Academy of Social Sciences, nearly 90% of Chinese business owners think the tax burden is heavy.
Labor price: China advantage still
China is still far below the world average, and its advantages are not lost.
High labor costs and age structure is a major problem in overseas production. Cao Dewang said in an interview with Caixin reporter, the average wage of factory workers in the United States is about eight times the country, and the age of about fifty or sixty years old. "We can't recruit young workers we want." He said.
However, Chinese employers face greater upward pressure on labor costs. Private enterprise wage growth in the four years after maintaining double-digit decline in 2015 to 8.8%, but still higher than the economic growth rate.
The problem of rising labor costs, Cao Dewang told the new financial reporter interview that the price is mainly due to changes in market supply and demand, manufacturing labor market supply less decreasing cost, and said it should be through the inhibition of the overheated real estate and infrastructure investment, effectively guide the labor to manufacturing reflux, to improve the structure of the labor market. Support the development of manufacturing industry.
