According to a latest report, the Chinese central government’s policy to cancel LED industry subsidies will be extended to local governments.
The Chinese government has issued massive subsidies to local LED lighting manufacturers in the past, which led to the imbalanced oversupply situation. Once the Chinese central and local governments cancel LED subsidies, Chinese LED manufacturers will find it difficult to survive.
In a recent statement issued by Chinese Central Government to regulate government subsidiaries, the statement highlighted certain local governments have been issuing financial subsidies in the form of taxes or other forms subsidies to promote local economic development. Although, these subsidiaries have urged industry developments, it has also disrupted market order and affected macroeconomic policies. Some of these subsidies have even violated international agreements the Chinese government signed or caused trade conflicts. Thus, the central government will require local governments to submit all subsidiary project applications to the central government for review before March 2015.