This time, Li Jianhui did not ask members of the Donghua Society to negotiate with the North. Instead, he directly arranged for Shi Shaoming to lead a delegation led by Toru Iwatani, Liu Qiulin, Xu Hongfei, Jiang Jianming and other senior group officials to communicate with the North.
In the living room of Xinghua Society in Xiangjiang, Li Jueshen faced many senior officials of the Xinjian Department headed by Shi Shaoming, knowing that nothing good would happen this time.
According to his understanding and during his tenure as president, apart from Li Jianhui and his wife, this was the first time a senior member of the Xin Jian Department came here.
As the leader this time and the person in charge of Xin Jian Department’s Greater China Affairs, Shi Shaoming took the seat and spoke first:
"Director Liao, President Li, and all the leaders, we came here specially to visit today, mainly to communicate about your recent issue of new tax rates for domestic sales of foreign-invested products."
Mr. Liao and Li Jueshen actually knew it after the tax rate came out, but they were afraid that matters in this regard would not be easily settled.
What they didn't expect was that Xin Jian Department would be the vanguard this time.
"Mr. Shi, as early as two months ago, our senior management communicated with Mr. Li Jianhui and other business elites about this matter. Mr. Li also expressed his full compliance with our tax rate adjustment.
After comprehensively considering the interests of the country and foreign-funded enterprises, we have set this relatively appropriate tax rate. I wonder what Mr. Shi’s opinions are on this tax rate?”
Faced with Liao Lao's words, Shi Shaoming said calmly: "Our major companies have no objections to this tax rate. After all, this is a national policy and it is not something that our companies can interfere with.
It is only because of the 15% income tax that our company's products are sold domestically, so we are willing to reach an agreement with you that domestic sales profits will not be converted into foreign exchange and transferred out of the country within a short period of time.
Now you have increased the tax rate, which is not much different from the tax rate for domestic sales of products invested by foreign enterprises in most countries and regions.
We also hope that, like most countries and regions, you can relax the restrictions on enterprises converting profits from domestic sales into foreign exchange and leaving the country.
Only in this way can we truly achieve win-win cooperation between both parties, instead of implementing a double-standard policy that only allows our company to assume its due obligations but does not allow our company to obtain the right to make profits."
Mr. Liao originally thought that the Xin Jian group was dissatisfied with the tax rate, so he arranged for Shi Shaoming and other senior officials to come. Unexpectedly, he wanted to abrogate the previous agreement on not leaving the country for twenty years for profits.
To be honest, this quite surprised him. You must know that Xin Jian invested tens of billions of dollars in two highways, three airports, three ports, and several buildings in the mainland. The company's profits in the north were not transferred out in a short time.
need.
It's just that he is not easy to respond to this aspect. If most countries and regions are to follow, they should indeed abrogate this agreement.
However, the current domestic demand for foreign exchange is quite large. Once the relevant agreements are abolished, it will immediately have a huge impact on domestic foreign exchange and also affect the development of the country.
"Mr. Shi, I believe you are also aware of our country's foreign exchange situation. The reason why your companies were qualified for domestic sales was because of signing this agreement.
If you are unwilling to accept this agreement, then we can only say sorry. Your products can only go through customs before entering the mainland market.
As for the corporate tax rate for domestically sold products, it is impossible to maintain the income tax at 15% because of this agreement. We will not protect local companies and specifically target foreign-funded companies, and it is even less possible to harm the interests of domestic companies because of the interests of foreign-funded companies."
Shi Shaoming and others did not expect that the other party would have such a tough attitude, leaving no room for negotiation at all.
They were given only two options. One was to accept the new tax rate and still abide by the previous agreement.
Otherwise, we should give up our qualifications for domestic sales, have all our products pass customs, and be sold in the northern market as imported products.
In the north, foreign exchange is limited and there is a quota for imported products every year. If these companies give up their qualifications for domestic sales, it means giving up a large market in the north in a short period of time.
"Director Liao, you should be aware that the middle and senior management of our northern production base are all from Xiangjiang, and their wages cannot be paid in RMB. After all, their families still need to live in Xiangjiang.
Even if we do not abolish the previously signed agreement not to transfer profits within twenty years, we still hope to make changes that will allow us to transfer at least 50% of our profits every year.
Of course, if the time can be reduced, we can make some concessions on this, but the minimum cannot be less than 20%.
In addition, due to the relatively large number of employees in our companies in the mainland, our companies will establish employee unions in the near future in accordance with international practices, and the union president will be selected from among the employees of the company."
Shi Shaoming's previous conditions were fine. As soon as he heard that Xin Jian was establishing an employee union in a northern enterprise, Mr. Liao, Li Jueshen and others immediately lost their previous composure.
They had communicated with the Xinjian Department and hoped that the Xinjian Department would establish a corporate employee union in mainland enterprises, but there was a prerequisite, which was to establish a company D group.
However, the senior officials of the Xinjian Department only agreed to establish an employee union in the company and were not willing to establish Group D of the company, so they shelved the matter.
Unexpectedly, this time the Xin Jian Department has been establishing a trade union to put pressure on them. He knows very well about the trade unions of the companies under the Tung Wah Association.
This is a union that is completely controlled by the Tung Wah Association. This union more often than not protects the interests of the employees, but the interests of the Tung Wah Association.
Donghua United Federation of Trade Unions, the Chairman of the Federation of Trade Unions is Zhang Hui. Ordinary citizens who have experienced this in Hong Kong may not know it well, but they know it quite well.
He was once the old superior of Chen Zhiyong and others. After coming to Xiangjiang, he was also the elder of Diaojingling Village, and Li Jianhui and others respected him very much.
After Tiu Keng Leng was renamed Jinghua Village, he was invited by Li Jianhui to serve as the chairman of the Xinjian Group Trade Union, and was also elected as the chairman of the Tung Wah United Federation of Trade Unions.
Even Mr. Liao suspected that the high-level officials of the Xinjian Department came to visit this time out of drunkenness. The new tax rate for domestic sales companies might just be a pretext, and the other party was more likely to come because of the company's labor union.
Mr. Liao obviously did not want to see a group emerge in the mainland that was not guided and controlled by the government, so he brought up Group D again. The meaning of his words was quite clear. It is okay to establish an enterprise union, but Group D must be established in the enterprise.
He also took the development of the Xianghua Club in mainland China over the past two years as an example to highlight the benefits of Group D to corporate development.
"Mr. Liao, our enterprises under Donghua Economic Mutual Aid Association have always followed the association's purpose and developed our own enterprises according to our duties. We do not interfere in any political affairs or favor any political D.
Enterprise unions are unions that safeguard the interests of enterprise employees. The nature of the union should be pure and should not be affected by external factors.
The development of our enterprise should also be simple, that is, make our products popular with consumers and win the market with quality, rather than lingering under the protection of policies.
We are not qualified to dictate what path the companies affiliated to the Xianghua Economic Mutual Aid Association are willing to take, but the development direction of our company is clear, even if we lose some markets as a result.
We hope that Mr. Liao and President Li can convey the opinions of our company, and we also hope that the senior management can respond as soon as possible. After all, there are only about ten days until January, and we can adjust our industrial layout in time."
…
After seeing off Shi Shaoming and others, Mr. Liao and Li Jueshen immediately held an emergency meeting.
The two of them knew the meaning of Shi Shaoming's last words very well, because the cities of Rayong, Johor Bahru, Cebu, Bandung, and Sin Chew, as ASEAN's internal economic open zones, have extremely many preferential policies, including tariffs and taxes.
The ASEAN market is the core development market of the Tung Hwa Association. If they do not make any concessions this time, they are afraid that the Tung Hwa Association and the mass production companies that support the Tung Hwa Association will move to Johor Bahru, Rayong, Cebu and other cities.
However, Tung Wah Club did not seem to be prepared to give them too much time. In the afternoon of that day, Mr. Liao received news that Jingyi Electric would transfer part of its production plant and production lines to Aimeike Electrical Appliances, and this part of the production line employees would be transferred to Aimeike Electric.
Gao Electrical Appliances took over, which also meant that Jingyi Electrical Appliances officially announced that it would give up its domestic sales qualifications.
Mr. Liao knows very well that this is just the beginning, and more companies will choose to relocate in the future, especially those small and medium-sized textile and garment companies that mainly sell domestically.
The increase in tax rates and restrictions on profit transfers will allow these companies to develop in other areas, especially areas where Tung Wah Club is currently focusing its development.
In order to avoid a bigger disturbance, Mr. Liao flew directly to the capital that evening after contacting the senior officials. At the same time, many senior officials from Guangdong Province and Pengcheng also went to the capital.
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