Abolishing the Minimum Registered Capital Requirement Will Promote the Development of the Printing Industry

[ppzhan abstract] As one of China's traditional industries, printing has always been an important part of China's economy. Recently, the removal of the minimum registered capital requirement will undoubtedly lower the entry threshold for the printing industry once again, injecting new vitality into the printing industry, which is currently at a low point in its development cycle.

On October 25, the State Council held an executive meeting to study and arrange the reform of the company registered capital registration system. The reform mainly covers the following: first, abolishing the minimum registered capital requirement for limited liability companies, one-person limited liability companies and joint stock companies, no longer restricting the capital contribution ratio of shareholders (promoters) or the deadline for paying in capital contributions when a company is established, and no longer treating a company's paid-in capital as a matter for industrial and commercial registration; second, changing the enterprise annual inspection system to a reporting system; third, relaxing the registration conditions for the domicile (business premises) of market entities; fourth, vigorously advancing the building of an enterprise integrity system; and fifth, advancing the change of registered capital from a paid-in registration system to a subscribed registration system.

Relaxed Entry Thresholds Will Energize Printing Enterprises

The relaxation of registered capital requirements has undoubtedly delighted many entrepreneurs and those hovering on the edge of starting a business. In theory, it has become possible for everyone to own a company, which is a huge boost especially for small and medium-sized enterprises, micro and small enterprises, and the large numbers of returnees and university graduates starting businesses. For the printing industry, which has as many as 100,000 enterprises, most of them small and medium-sized, this is undoubtedly good news as well. By relaxing entry thresholds, this reform will further energize a group of small and medium-sized and micro and small printing enterprises and promote the development and prosperity of the printing industry.

In fact, since the beginning of this year, the state has made various efforts to promote reform of the printing industry. On June 19, the State Council approved the "Three Determinations" (functions, institutions and staffing) regulations for the State Administration of Press, Publication, Radio, Film and Television. Although the regulatory responsibilities for the printing industry remain unchanged, digital printing and green printing were written into the new regulations. This shows the importance of the healthy and sustainable development of the printing industry at the national level.

The State Council executive meeting held on July 24 decided that, in order to support the development of micro and small enterprises and in line with the principle of fair tax burdens, starting from August 1 this year, small-scale VAT taxpayers and business tax taxpayers among micro and small enterprises with monthly sales of no more than 20,000 yuan would be temporarily exempted from value-added tax and business tax. To a certain extent, this also eases the burden on micro and small printing enterprises.

"Wide Entry, Strict Supervision" Streamlines Administration and Delegates Power to the Printing Industry

At the 2013 National Printing Managers Annual Conference held in September, Wang Yanbin, Director General of the Printing and Distribution Department of the State Administration of Press, Publication, Radio, Film and Television, said in his keynote speech that, in accordance with the arrangements of the Administration, efforts would be made to clearly delineate the boundary between the government and the market, to take the initiative in doing what the government should do, and to guide and drive the rapid development of China's printing industry.

Director General Wang pointed out that the market leads industrial development while the government guides it. Therefore, the focus of this institutional reform is to combine institutional adjustment with functional transformation, taking functional transformation as the core and reform of the administrative approval system as the breakthrough point, and, by streamlining administration and delegating power, to further give play to the fundamental role of the market in allocating resources and to stimulate the creativity of all kinds of market entities. "To put it plainly, whether to set up a printing plant, what type of printing plant to set up and how much to invest in it should be judged by enterprises according to changes in market supply and demand."

Director General Wang stressed: "Following the central government's approach of wide entry and strict supervision, we will streamline administration and delegate power in the printing industry, cancel more approvals, simplify more procedures and open up more areas. Given that much capital is still willing to invest in the printing industry, the issue of entry thresholds should be studied in a timely manner. By adjusting the entry system, we should attract qualified and motivated enterprises to enter quickly, using effective delegation to promote active supervision. By reducing approvals and simplifying procedures, we can squeeze out the excess and costs in the capital entering the industry, especially for private and foreign-funded enterprises, so that capital can be invested in production and the market more quickly and the role of capital in the market can be activated."

Printing Supervision Will Become Stricter

However, reducing approvals and simplifying procedures does not mean the state is completely delegating power over printing enterprises. Not long ago, the State Council also approved the related policies for the "Shanghai Pilot Free Trade Zone". To promote the transformation of government functions, the Shanghai Pilot Free Trade Zone will explore the negative list, a new model of economic management. For general foreign investment projects not included in the negative list, a business license, organization code and tax registration can be obtained in as little as 4 days. The negative list includes restrictions on investment in publication printing, namely the requirement that investment in publication printing must be controlled by the Chinese side and that registered capital must be no less than 10 million yuan.

Wide entry presupposes strict supervision. On the instructions of Jiang Jianguo, Secretary of the Administration, the Administration has further strengthened and improved printing supervision, resolutely "investigating and punishing a number of enterprises, rectifying a number of enterprises and shutting down a number of enterprises" that seriously violate regulations. In 2012, a total of 724 printing enterprises nationwide received administrative penalties in the form of fines, 42 printing enterprises had their business licenses revoked, and the legal representatives of 15 printing enterprises were handed over to judicial authorities for violating the law. Localities have also taken annual inspection and verification as a starting point to strengthen entry and exit management. Through annual verification, Henan Province deregistered 81 printing enterprises last year, Anhui Province 45, Hubei Province 35, Guizhou Province 24 and Sichuan Province 20.

Printing Enterprises Should Further Strengthen Their Own Management

With the reform of the company registered capital registration system and the streamlining of administration and delegation of power in the printing industry as opportunities, the vitality of printing enterprises has been further released. Yet for printing enterprises at large, the reform of the company registered capital registration system is also a double-edged sword. According to the plan of the State Council, the enterprise annual inspection system will be changed to an annual reporting system, which any organization or individual may consult, making enterprise-related information more transparent. At the same time, the building of an enterprise integrity system will be vigorously advanced, with emphasis on information disclosure and sharing, so that enterprise registration and filing, annual reports, qualifications and so on are made public through the credit information system for market entities. All these new changes have placed new requirements on the management of printing enterprises.

Printing enterprises need to further strengthen their own management. Compared with the past, they must face supervision by society as a whole with greater openness, transparency and integrity. Being oriented to market demand means solving development problems more through the market. At present, China's printing industry faces many problems such as overcapacity, and with lower entry thresholds, fierce market competition will intensify further. If enterprises cannot strengthen their own management, once a violation occurs they will face the pressure of being "restricted everywhere", and their "cost of lost credibility" will rise along with deeper information disclosure. For printing enterprises caught in the wave of change, this is indeed the best of times and the worst of times.

——This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-361860.html