Ambiguity in local governments increases enterprises' investment risk
ANBOUND
Earlier this year, Ningxia Development and Reform Commission issued a notice, aiming to increase 2016 annual photovoltaic power plant construction scale through price bidding, but the notice was withdrawn in just one day, and the enterprises were forced to re-bid while facing the preconditions set by the government. In fact, for many Chinese provinces, to invest in photovoltaic power plants, the enterprises need to invest in other additional industries as well, and this is an open secret. Take Ningxia as an example, spending billions for additional industries is no longer attractive for enterprises. Anbound believes that this approach of local governments increases the administrative costs of enterprises. In recent years, the State Council has been desperately simplifying decentralization, more importantly there is the reform of administrative efficiency, such as increasing the transparency of the policy and stability. If the enterprise is tossing back and forth by policy and administrative measures, the result is ultimately a lose-lose situation.